Dynamic Incentive Contracts with Uncorrelated Private Information and History Dependent Outcomes

In existing papers on dynamic incentive contracts, the dynamic structure of the principal-agent relationship arises exclusively from the ability of the principal to learn about the hidden information over time. In this paper we deal with a different source of dynamics, which is considered standard in all areas of economics other than the information literature: we study situations where current opportunities depend on past and current actions, notwithstanding any information conveyed by the actions. Standard examples include investment, Learning by doing , and R&D. In order to focus on this neglected source of dynamics, we restrict our attention to situations involving asymmetric information in each period, but without any intertemporal informational correlation, so that no dynamic effect arises from informational asymmetries directly. This makes comparisons with static results both easier and more interesting. La dynamique des modèles actuels de contrats incitatifs provient de la capacité du principal, à partir des actions observées dans le présent, d'apprendre quelque chose sur l'information qui ne lui sera pas directement accessible dans le futur. Nous étudions ici une autre source de dynamique, négligée dans la littérature sur l'information0501s standard dans toutes les autres branches de la science économique, et qui résulte du fait que les actions courantes définissent les opportunités futures. C'est ce qui se passe lorsqu'il y a investissement, apprentissage, R-D, etc. Pour bien identifier les propriétés dynamiques résultant de ce type de situations dans les modèles de principal-agent avec information asymétrique, nous nous en tenons à des modèles où il n'y a aucune corrélation entre information présente et information future, si bien qu'aucun effet dynamique ne résulte directement de l'asymétrie d'information.Incentive contracts, Dynamic, Asymmetric information, Principal agent relationship, Investment, Learning by doing, Contrats incitatifs, Dynamique, Information asymétrique, Relation principal-agent, Investissement, Learning by doing.

Real Investment Decisions Under Adjustment Costs and Asymmetric Information

We study the cost-of-adjustment model of investment when there is asymmetry of information between owners (the principal) and managers (the agent). Information asymmetry distorts the relationship between investment and the cost of capital for all agent types, and a regime of inaction appears over a certain cost range, in an observationnally different way than when fixed adjustment costs, or irreversibilities, cause a similar phenomenon. Uncertainty, in the form of an increase in the spread of agents' types, tends to reduce investment despite symmetric adjustment cost and perfect competition. The model gives a new interpretation of Tobin's q under asymmetric information, explaining some results of the mergers and acquisition literature.Investment, information asymmetry, adjustment cost, mergers and acquisition

Overcoming Natural Resource Constraints Through R&D

We study the optimal policies of research and development in the context of a resource-exploiting economy. We distinguish two cases: non-renewable resources and renewable resources. In the first case, we show that it is useful to construct an index of scarcity, which is the product of the level of technical know-how and the aggregate stock of resources. Provided that the rate of discount is not too high, there exists a critical level of this index, below which one must maximize the rate of investment in R&D. Starting from this critical level, it is possible to maintain a constant rate of consumption, by substituting knowledge for natural resources. In the case of renewable resources, we show that the optimal policy is to give priority to the production of consumption goods, and the rates of investments in R&D are determined residually. Nous étudions la politique optimale en R&D dans le secteur de ressources naturelles. On distingue deux cas : ressources non renouvelables, et ressources renouvelables. Dans le premier cas, nous montrons qu'il est utile de construire un indice de rareté, qui est le produit du niveau de connaissance scientifique et du stock de ressources. Pourvu que le taux d'escompte ne soit pas trop élevé, il existe un niveau critique de cet indice au-dessous duquel il faut maximiser le taux d'investissement en R&D. À partir de ce niveau critique, on peut atteindre un état stationnaire de consommation en substituant la ressource par la connaissance. Dans le cas de ressources renouvelables, la politique optimale est d'accorder la priorité à la production des biens de consommation, et les investissements en R&D sont déterminés comme résiduels.optimal R&D policies, natural resources, scarcity index, politique optimale en R&D, ressources naturelles, indice de rareté

Infographic: Be a STEM Professional

Infographic describing top STEM professions

Pierce Long to John Sparhawk, November 10, 1781

Certification that John Sparhawk had approbation for retailing Spiritous Liquors, Portsmouth. Signed by Pierce Long, Nathaniel Forsom, and George Ge[?].https://digitalcommons.kean.edu/lhc_1780s/1074/thumbnail.jp

Cell contraction induces long-ranged stress stiffening in the extracellular matrix

Animal cells in tissues are supported by biopolymer matrices, which typically exhibit highly nonlinear mechanical properties. While the linear elasticity of the matrix can significantly impact cell mechanics and functionality, it remains largely unknown how cells, in turn, affect the nonlinear mechanics of their surrounding matrix. Here we show that living contractile cells are able to generate a massive stiffness gradient in three distinct 3D extracellular matrix model systems: collagen, fibrin, and Matrigel. We decipher this remarkable behavior by introducing Nonlinear Stress Inference Microscopy (NSIM), a novel technique to infer stress fields in a 3D matrix from nonlinear microrheology measurement with optical tweezers. Using NSIM and simulations, we reveal a long-ranged propagation of cell-generated stresses resulting from local filament buckling. This slow decay of stress gives rise to the large spatial extent of the observed cell-induced matrix stiffness gradient, which could form a mechanism for mechanical communication between cells

The Impact of Antihypertensive Drugs on the Number and Risk of Death, Stroke and Myocardial Infarction in the United States

Estimating the value of medical innovation is a continual challenge. In this research, we quantify the impact of antihypertensive therapy on U.S. blood pressures, risk and number of heart attacks, strokes, and deaths. We also consider the potential for further improvements. We estimate the value of innovation using equations relating blood pressure to adverse outcomes from the Framingham Heart Study. Our results show that without antihypertensive therapy, 1999-2000 average blood pressure for the U.S. population age 40 plus would have been 10-13 percent higher. 86,000 excess premature deaths from cardiovascular disease (2001), and 833,000 hospital discharges for stroke and heart attacks (2002) would have occurred. Life expectancy would be 0.5 (men) and 0.4 (women) years lower. At guideline care, there would have been 89,000 fewer premature deaths (2001) and 420,000 fewer hospital discharges for stroke and heart attack (2002) than observed. Our analysis suggests that antihypertensive therapy has had a significant impact on cardiovascular health outcomes but that mortality gains would have been approximately twice as high if guideline care had been achieved for all.

Beam to concrete-filled rectangular hollow section column joints using long bolts

peer reviewedThis paper presents a research on a specific type of unstiffened extended end-plate joint used to connect I-shaped beams to concrete-filled rectangular hollow section columns. The main idea is to use long bolts throughout the column to connect the beam end-plates, so avoiding intermediate connecting elements (e.g. a reverse U channel) or special bolts (e.g. blind bolts). However, the use of long bolts for beam-to-column connections is still rare in the construction and no design procedure exists in the Eurocodes; this justifies the pre-sent research. Firstly, a test program within a RFCS European project titled HSS-SERF “High Strength Steel in Seismic Resistant Building Frames”, 2009-2013 was performed. In this project, specimens subjected to sig-nificant bending moments (and shear) or to shear only was defined. Then, analytical developments based on the component approach and aimed at predicting the joint response have been carried out; their validity is demonstrated through comparisons with the tests. Finally, design guidelines have been provided

Real Investment Decisions Under Information Constraints

We investigate investment behavior when there is asymmetry of information between owners (the principal) and managers (the agent). The model accepts the standard cost-of-adjustment model as a particular case and is directly compared with it. For all types, information asymmetry distorts the relationship between investment and the cost of capital, and the relationship between investment and the shadow value of capital. In particular, a regime of inaction appears over a certain cost range, in an observationnally different way than when fixed adjustment costs, or irreversibilities, cause a similar phenomenon. Uncertainty, in the form of an increase in the spread of agents' types, tends to reduce investment despite symmetric adjustment cost and perfect competition. The model clarifies the interpretation of Tobin's q under asymmetric information and explains some results of the mergers and acquisition literature. En présence d'asymétrie d'information entre propriétaires (le principal) et administrateurs (l'agent), la relation investissement coût du capital et la relation investissement valeur implicite du capital subissent une distorsion pour tous les types. Dans un modèle avec coût d'ajustement par ailleurs standard, il apparaît notamment un régime d'inaction pour une certaine gamme de coûts. Ce phénomène se présente sous une forme différente de ce qu'implique la présence de coûts fixes ou d'irréversibilités,0501s ressemble à ce qui survient lorsque le coût du capital est différent pour une hausse que pour une baisse du stock. L'incertitude, qui prend la forme d'un élargissement de la distribution des types, tend cependant à réduire l'investissement. Le modèle clarifie l'interprétation du q de Tobin sous asymétrie d'information et explique certains résultats de la littérature sur les fusions et acquisitions.Incentive contracts; Dynamic/Asymmetric information; Principal agent relationship; Investment; Cost of adjustment; Uncertainty, Contrats incitatifs ; dynamique ; information asymétrique ; relation principal-agent ; investissement ; incertitude.