Safety Monitoring, Capital Structure, and "Financial Responsibility"

Firms will exert too little preventive care if damages are likely to exceed their equity. This is particularly important for environmental and product liability and motivates the current discussion about extending liability to creditors. We propose a model where the firm can be financed by equity, bank debt or publicly traded debt. There is a moral hazard problem about the choice of care that can be mitigated through stochastic monitoring of its safety standards. We show that the optimal allocation can always be implemented by a liability regime of "financial responsibility", that is mandatory liability coverage that can be fulfilled either by an insurer or by a lender. We find that the first best can only be achieved if the defendants are fully liable. This result is in contrast to related models which find liability below the level of harm optimal, and we show that the difference is due to the inclusion of safety monitoring. Financial responsibility is strictly superior to lender liability alone or strict liability without extended liability, but their relative ranking may vary.lender liability;compulsory insurance;choice betwwen private and public debt;limited liability effect

Safety Monitoring, Capital Structure, and "Financial Responsibility"

Firms will exert too little preventive care if damages are likely to exceed their equity. This is particularly important for environmental and product liability and motivates the current discussion about extending liability to creditors. We propose a model where the firm can be financed by equity, bank debt or publicly traded debt. There is a moral hazard problem about the choice of care that can be mitigated through stochastic monitoring of its safety standards. We show that the optimal allocation can always be implemented by a liability regime of "financial responsibility", that is mandatory liability coverage that can be fulfilled either by an insurer or by a lender. We find that the first best can only be achieved if the defendants are fully liable. This result is in contrast to related models which find liability below the level of harm optimal, and we show that the difference is due to the inclusion of safety monitoring. Financial responsibility is strictly superior to lender liability alone or strict liability without extended liability, but their relative ranking may vary.

Co-opetition models for governing professional football

In recent years, models for co-creating value in a business-to-business context have often been examined with the aim of studying the strategies implemented by and among organisations for competitive and co-operative purposes. The traditional concepts of competition and co-operation between businesses have now evolved, both in terms of the sector in which the businesses operate and in terms of the type of goods they produce. Many researchers have, in recent times, investigated the determinants that can influence the way in which the model of co-opetition can be applied to the football world. Research interest lies in the particular features of what makes a good football. In this paper, the aim is to conduct an analysis of the rules governing the “football system”, while also looking at the determinants of the demand function within football entertainment. This entails applying to football match management the co-opetition model, a recognised model that combines competition and co-operation with the view of creating and distributing value. It can, therefore, be said that, for a spectator, watching sport is an experience of high suspense, and this suspense, in turn, depends upon the degree of uncertainty in the outcome. It follows that the rules ensuring that both these elements can be satisfied are a fertile ground for co-operation between clubs, as it is in the interest of all stakeholders to offer increasingly more attractive football, in comparison with other competing products. Our end purpose is to understand how co-opetition can be achieved within professional football

Liberalizing trade in environmental goods and services

We examine the effects of trade liberalization in environmental goods in a model with one domestic downstream polluting firm and two upstream firms (one domestic, one foreign). The upstream firms offer their technologies to the downstream firm at a flat fee. The domestic government sets the emission tax rate after the outcome of R&D is known. The effect of liberalization on the domestic upstream firm's R&D incentive is ambiguous. Liberalization usually results in cleaner production, which allows the country to reach higher welfare. However this increase in welfare is typically achieved at the expense of the environment (a backfire effect)

Optimal liability sharing and court errors: an exploratory analysis

We focus in this paper on the effects of court errors on the optimal sharing of liability between firms and financiers, as an environmental policy instrument. Using a structural model of the interactions between firms, financial institutions, governments and courts we show, through numerical simulations, the distortions in liability sharing between firms and financiers that the imperfect implementation of government policies implies. We consider in particular the role played by the efficiency of the courts in avoiding Type I (finding an innocent firm guilty of inappropriate care) and Type II (finding a guilty firm innocent of inappropriate care) errors. This role is considered in a context where liability sharing is already distorted (when compared with first best values) due not only to the courts' own imperfect assessment of safety care levels exerted by firm but also to the presence of moral hazard and adverse selection in financial contracting, as well as of noncongruence of objectives between firms and financiers on the one hand and social welfare maximization on the other. Our results indicate that an increase in the efficiency of the court system in avoiding errors raises safety care levels, thereby reducing the probability of accident, and allowing the social welfare maximizing government to impose a lower liability [higher] share for firms [financiers] as well as a lower standard level of care

Appearance Modeling of Living Human Tissues

This is the peer reviewed version of the following article: Nunes, A.L.P., Maciel, A., Meyer, G.W., John, N.W., Baranoski, G.V.G., & Walter, M. (2019). Appearance Modeling of Living Human Tissues, Computer Graphics Forum, which has been published in final form at https://doi.org/10.1111/cgf.13604. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-ArchivingThe visual fidelity of realistic renderings in Computer Graphics depends fundamentally upon how we model the appearance of objects resulting from the interaction between light and matter reaching the eye. In this paper, we survey the research addressing appearance modeling of living human tissue. Among the many classes of natural materials already researched in Computer Graphics, living human tissues such as blood and skin have recently seen an increase in attention from graphics research. There is already an incipient but substantial body of literature on this topic, but we also lack a structured review as presented here. We introduce a classification for the approaches using the four types of human tissues as classifiers. We show a growing trend of solutions that use first principles from Physics and Biology as fundamental knowledge upon which the models are built. The organic quality of visual results provided by these Biophysical approaches is mainly determined by the optical properties of biophysical components interacting with light. Beyond just picture making, these models can be used in predictive simulations, with the potential for impact in many other areas