Moral Hazard with Counterfeit Signals

In many moral hazard problems, the principal evaluates the agent's performance based on signals which the agent may suppress and replace with counterfeits. This form of fraud may affect the design of optimal contracts drastically, leading to complete market failure in extreme cases. I show that in optimal contracts, the principal deters all fraud, and does so by two complementary mechanisms. First, the principal punishes signals that are suspicious, i.e. appear counterfeit. Second, the principal is lenient on bad signals that the agent could suppress, but does not

Outlining the distinguishing characteristics of an evolutionary theory of innovation

This paper discusses notions of theory in relation to evolutionary understandings of innovation. It starts by empirically demonstrating the relevance of evolutionary perspectives – broadly defined – for understanding the “basics of what’s going on” in the economic sphere when it comes to innovation. It continues to argue and show that appreciative evolutionary understandings of innovation are connected to the Darwinian processes of variation, selection and retention in the theoretical “high range”. Multilevel theorizing, where researchers move between different levels and degrees of abstraction is therefore a key feature of an evolutionary theory of innovation. The paper ends by identifying puzzles and research challenges that evolutionary reasoning with respect to innovation need to address.Innovation, evolutionary theory.

Firm heterogeneity within industries: How important is “industry” to innovation?

In this paper we assess how important “industry” is to innovation. Our empirical estimates suggest that “industry factors” matter little to how firms’ search for new innovations. These results offer empirical support to recent evolutionary theory where firms have heterogeneous capabilities and pursue different approaches to innovation. Structural variables at the industry level do however have a substantial influence on the firm level propensity to innovate. This result supports “sectoral innovation system” approaches where firms are “constrained” by technological regimes underlying industry evolution. Hence, the driving forces behind technological evolution are found at both the firm and industry level.

Dealing with \u27western classical music\u27 in Indian music schools. A case study in Kolkata, Bangalore, Goa and Mumbai

This article summarizes the design and results of an efficiency study that accompanied a skill-enhancement project for Indian teachers of Western classical music in selected cities in India, undertaken by the Goethe-Institut Kolkata from 2009 to 2011 in collaboration with the University of Music Würzburg. At the same time it contributes to a segment of comparative music educational research with an interdisciplinary approach to provide further thoughts on a methodological and theoretical foundation in comparative music educational research. The framework of this case study is a challenge for the researcher since it evokes right from the beginning various prejudices ranging from postcolonial criticism to political intentions and workouts of (German) development policies and so forth; however, by understanding comparative research as the careful evaluation of one’s diversity of experience by acknowledging that this music praxis has roots in the past as well as in the present leads to an adjustment and a holistic understanding of this segment of music education in India. (DIPF/Orig.

Elliptical instability of compressible flow in ellipsoids

Elliptical instability is due to a parametric resonance of two inertial modes in a fluid velocity field with elliptical streamlines. This flow is a simple model of the motion in a tidally deformed, rotating body. Elliptical instability typically leads to three-dimensional turbulence. The associated turbulent dissipation together with the dissipation of the large scale mode may be important for the synchronization process in stellar and planetary binary systems. In order to determine the influence of the compressibility on the stability limits of tidal flows in stars or planets, we calculate the growth rates of perturbations in flows with elliptical streamlines within ellipsoidal boundaries of small ellipticity. In addition, the influence of the orbiting frequency of the tidal perturber $\Omega_P$ and the viscosity of the fluid are taken into account