Grade Expectations And Overconfidence: Is Economics Different?

Do students in economics courses predict their course grade more accurately than students in other business school courses? Data over several semesters and from a variety of disciplines suggest that business school students in all disciplines are overconfident. After controlling for other factors, however, Economics and Accounting students predict their grades more accurately than other students

Job Search Strategies and Outcomes for Academic Economists: A Middle-Market View

The job market for academic economists is examined with data from a sample of applicants for a position at a middle-tier university. Search methods and outcomes are reported, and regression results for an accepted salary equation are presented. A recursive system of equations is also estimated to examine the effects of gender, degree quality and networking on the outcomes of the various stages in the job search process.Job Search

AUDITING IN A PRINCIPAL-AGENT MODEL: INFORMATION AND INCENTIVES IN CONTRACT DESIGN

Agency models have been formulated to examine the relationship that develops when an agent is engaged to act on behalf of a principal. The agent is assumed to choose an action which determines a payoff. The payoff is divided between the principal and the agent according to the terms of a prespecified contract, chosen by the principal. Agency relationships exist because of information asymmetries between the principal and the agent. If the agent has no better information than the principal, for example, there would be no reason for the principal to enter into an agency relationship. The principal and the agent have different utility functions and thus different objectives. The principal\u27s problem is to design a contract so that the agent is given incentives to act in the principal\u27s behalf. The principal\u27s ability to effect the actions of the agent is limited by the amount of information available to the principal. This paper extends previous work by developing a formal principal-agent model in which the principal is allowed to audit the actions of the agent to acquire information. Auditing is treated as a productive activity which can be performed by the principal to produce an information signal. The information signal is used by the principal as an input in its decision process. Auditing to produce information is costly to the principal. The costs of auditing and the corresponding value of the information produced are compared to determine the optimal amount of effort to use in auditing. The optimal auditing solution is characterized and is compared to non-auditing solutions. Some properties of the optimal auditing solution are examined. Contracts which allow the principal to audit are shown to dominate less flexible contracts. A multilevel principal-agent model with auditing also is developed so that the behavior of society in designing incentives for the principal can be examined. A relationship between a regulator and a regulated firm is developed to illustrate the auditing model. An example is presented in which an auditing solution is compared to solutions when full information is available to the principal, when no information is available, and when delegation is used. The value of auditing and of delegation is shown to depend upon the assumptions made about the information available to the agent before production decisions are made. Finally, a formal audit process is described in a regulation setting and an audit solution is compared to an optimal incentive-compatible solution. Auditing is shown by example to be a potentially valuable activity for the regulator

Vertical integration of successive monopolists: a classroom experiment

This classroom experiment introduces students to the concept of double marginalization, i.e., the exercise of market power at successive vertical layers in a supply chain. By taking on roles of firms, students determine how the mark-ups are set at each successive production stage. They learn that final retail prices tend to be higher than if the firms were vertically integrated. Students compare the welfare implications of two potential solutions to the double marginalization problem: acquisition and franchise fees. The experiment also can stimulate a discussion of two-part tariffs, transfer pricing, contracting, and the Coase theorem

Tandem repeats lead to sequence assembly errors and impose multi-level challenges for genome and protein databases

The widespread occurrence of repetitive stretches of DNA in genomes of organisms across the tree of life imposes fundamental challenges for sequencing, genome assembly, and automated annotation of genes and proteins. This multi-level problem can lead to errors in genome and protein databases that are often not recognized or acknowledged. As a consequence, end users working with sequences with repetitive regions are faced with ‘ready-to-use’ deposited data whose trustworthiness is difficult to determine, let alone to quantify. Here, we provide a review of the problems associated with tandem repeat sequences that originate from different stages during the sequencing-assembly-annotation-deposition workflow, and that may proliferate in public database repositories affecting all downstream analyses. As a case study, we provide examples of the Atlantic cod genome, whose sequencing and assembly were hindered by a particularly high prevalence of tandem repeats. We complement this case study with examples from other species, where mis-annotations and sequencing errors have propagated into protein databases. With this review, we aim to raise the awareness level within the community of database users, and alert scientists working in the underlying workflow of database creation that the data they omit or improperly assemble may well contain important biological information valuable to others