More order with less law: on contract enforcement, trust, and crowding

Most contracts, whether between voters and politicians or between house owners and contractors, are incomplete. “More law,” it typically is assumed, increases the likelihood of contract performance by increasing the probability of enforcement and/or the cost of breach. We examine a contractual relationship in which the first mover has to decide whether she wants to enter a contract without knowing whether the second mover will perform. We analyze how contract enforceability affects individual performance for exogenous preferences. Then we apply a dynamic model of preference adaptation and find that economic incentives have a nonmonotonic effect on behavior. Individuals perform a contract when enforcement is strong or weak but not with medium enforcement probabilities: Trustworthiness is “crowded in” with weak and “crowded out” with medium enforcement. In a laboratory experiment we test our model’s implications and find support for the crowding prediction. Our finding is in line with the recent work on the role of contract enforcement and trust in formerly Communist countries

Learning trust

We examine the effects of different forms of feedback information on the performance of markets that suffer from moral hazard problems due to sequential exchange. As orthodox theory would predict, we find that providing buyers with information about sellers' trading history boosts market performance. More surprisingly, this beneficial effect of incentives for reputation building is considerably enhanced if sellers, too, can observe other sellers' trading history. This suggests that two-sided market transparency is an important ingredient for the design of well-functioning markets that are prone to moral hazard

Beneficial Betrayal Aversion

Many studies demonstrate the social benefits of cooperation. Likewise, recent studies convincingly demonstrate that betrayal aversion hinders trust and discourages cooperation. In this respect, betrayal aversion is unlike socially “beneficial” preferences including altruism, fairness and inequity aversion, all of which encourage cooperation and exchange. To our knowledge, other than the suggestion that it acts as a barrier to rash trust decisions, the benefits of betrayal aversion remain largely unexplored. Here we use laboratory experiments with human participants to show that groups including betrayal-averse agents achieve higher levels of reciprocity and more profitable social exchange than groups lacking betrayal aversion. These results are the first rigorous evidence on the benefits of betrayal aversion, and may help future research investigating cultural differences in betrayal aversion as well as future research on the evolutionary roots of betrayal aversion. Further, our results extend the understanding of how intentions affect social interactions and exchange and provide an effective platform for further research on betrayal aversion and its effects on human behavior

Requirements for Power Hardware-in-the-Loop Emulation of Distribution Grid Challenges

The ongoing transition of low voltage (LV) power grids towards active systems requires novel evaluation and testing concepts, in particular for realistic testing of devices. Power Hardware-in-the-Loop (PHIL) evaluations are a promising approach for this purpose. This paper presents preliminary investigations addressing the systematic design of PHIL applications and their applicable stability mechanisms and gives a detailed review of the related work. A requirement analysis for emulation of grid situations demanding system services is given and the realization of a PHIL setup is demonstrated in a residential scenario, comprising a hybrid electrical energy storage system (HESS)

Status of Flat Electron Beam Production

Last year at LINAC2000 [1] we reported our initial verification of the round beam (comparable transverse emittances) to flat beam (high transverse emittance ratio) transformation described by Brinkmann, Derbenev, and Flöttmann [2]. Further analysis of our data has confirmed that a transverse emittance ratio of approximately 50 was observed. Graphics representing observational detail are included here, and future plans outlined

Cooperation and Self-Regulation in a Model of Agents Playing Different Games

A simple model for cooperation between "selfish" agents, which play an extended version of the Prisoner's Dilemma(PD) game, in which they use arbitrary payoffs, is presented and studied. A continuous variable, representing the probability of cooperation, $p_k(t) \in$ [0,1], is assigned to each agent $k$ at time $t$. At each time step $t$ a pair of agents, chosen at random, interact by playing the game. The players update their $p_k(t)$ using a criteria based on the comparison of their utilities with the simplest estimate for expected income. The agents have no memory and use strategies not based on direct reciprocity nor 'tags'. Depending on the payoff matrix, the systems self-organizes - after a transient - into stationary states characterized by their average probability of cooperation $\bar{p}_{eq}$ and average equilibrium per-capita-income $\bar{p}_{eq},\bar{U}_\infty$. It turns out that the model exhibit some results that contradict the intuition. In particular, some games which - {\it a priory}- seems to favor defection most, may produce a relatively high degree of cooperation. Conversely, other games, which one would bet that lead to maximum cooperation, indeed are not the optimal for producing cooperation.Comment: 11 pages, 3 figures, keybords: Complex adaptive systems, Agent-based models, Social system

Design and Test of a Forward Neutron Calorimeter for the ZEUS Experiment

A lead scintillator sandwich sampling calorimeter has been installed in the HERA tunnel 105.6 m from the central ZEUS detector in the proton beam direction. It is designed to measure the energy and scattering angle of neutrons produced in charge exchange ep collisions. Before installation the calorimeter was tested and calibrated in the H6 beam at CERN where 120 GeV electrons, muons, pions and protons were made incident on the calorimeter. In addition, the spectrum of fast neutrons from charge exchange proton-lucite collisions was measured. The design and construction of the calorimeter is described, and the results of the CERN test reported. Special attention is paid to the measurement of shower position, shower width, and the separation of electromagnetic showers from hadronic showers. The overall energy scale as determined from the energy spectrum of charge exchange neutrons is compared to that obtained from direct beam hadrons.Comment: 45 pages, 22 Encapsulated Postscript figures, submitted to Nuclear Instruments and Method

The ZEUS Forward Plug Calorimeter with Lead-Scintillator Plates and WLS Fiber Readout

A Forward Plug Calorimeter (FPC) for the ZEUS detector at HERA has been built as a shashlik lead-scintillator calorimeter with wave length shifter fiber readout. Before installation it was tested and calibrated using the X5 test beam facility of the SPS accelerator at CERN. Electron, muon and pion beams in the momentum range of 10 to 100 GeV/c were used. Results of these measurements are presented as well as a calibration monitoring system based on a $^{60}$Co source.Comment: 38 pages (Latex); 26 figures (ps