Fairness and Contract Design

We show experimentally that fairness concerns may have a decisive impact on the actual and optimal choice of contracts in a moral hazard context. Bonus contracts that offer a voluntary and unenforceable bonus for satisfactory performance provide powerful incentives and are superior to explicit incentive contracts when there are some fair-minded players. But trust contracts that pay a generous wage upfront are less efficient than incentive contracts. The principals understand this and predominantly choose the bonus contracts. Our results are consistent with recently developed theories of fairness, which offer important new insights into the interaction of contract choices, fairness and incentives

Contracts, Fairness, and Incentives

We show experimentally that fairness concerns may have a decisive impact on both the actual and the optimal choice of contracts in a moral hazard context. Explicit incentive contracts that are optimal according to self-interest theory become inferior when some agents value fairness. Conversely, implicit bonus contracts that are doomed to fail among purely selfish actors provide powerful incentives and become superior when there are some fair-minded players. The principals understand this and predominantly choose the bonus contracts, even preferring a pure bonus contract over a contract that combines the enforcement power of explicit and implicit incentives. This contract preference is associated with the fact that explicit incentives weaken the enforcement power of implicit bonus incentives significantly. Our results are largely consistent with recently developed theories of fairness, which also offer interesting new insights into the interaction of contract choices, fairness and incentives.Moral Hazard; Incentives; Bonus Contract; Fairness; Inequity Aversion

Fairness, Incentives and Contractual Incompleteness

We show that concerns for fairness may have dramatic consequences for the optimal provision of incentives in a moral hazard context. Incentive contracts that are optimal when there are only selfish actors become inferior when some agents are concerned about fairness. Conversely, contracts that are doomed to fail when there are only selfish actors provide powerful incentives and become superior when there are also fair-minded players. These predictions are strongly supported by the results of a series of experiments. Furthermore, our results suggest that the existence of fair actors may be an important reason why many contracts are left deliberately incomplete.Incentive Contracts ; Moral Hazard ; Fairness ; Reciprocity ; Incomplete Contracts

Fairness and Contract Design

We show experimentally that fairness concerns may have a decisive impact on the actual and optimal choice of contracts in a moral hazard context. Bonus contracts that offer a voluntary and unenforceable bonus for satisfactory performance provide powerful incentives and are superior to explicit incentive contracts when there are some fair-minded players. But trust contracts that pay a generous wage upfront are less efficient than incentive contracts. The principals understand this and predominantly choose the bonus contracts. Our results are consistent with recently developed theories of fairness, which offer important new insights into the interaction of contract choices, fairness and incentives.Moral Hazard; Incentives; Bonus Contract; Trust Contract; Fairness; Inequity Aversion

Melting of Discrete Vortices via Quantum Fluctuations

We consider nonlinear boson states with a nontrivial phase structure in the three-site Bose-Hubbard ring, {\em quantum discrete vortices} (or {\em q-vortices}), and study their "melting" under the action of quantum fluctuations. We calculate the spatial correlations in the ground states to show the superfluid-insulator crossover and analyze the fidelity between the exact and variational ground states to explore the validity of the classical analysis. We examine the phase coherence and the effect of quantum fluctuations on q-vortices and reveal that the breakdown of these coherent structures through quantum fluctuations accompanies the superfluid-insulator crossover.Comment: Revised version, 4 pages, 5 figures, Accepted for publication in Physical Review Letter

Simulated Greenland Surface Mass Balance in the GISS ModelE2 GCM: Role of the Ice Sheet Surface

The rate of growth or retreat of the Greenland and Antarctic ice sheets remains a highly uncertain component of future sea level change. Here we examine the simulation of Greenland ice sheet surface mass balance (GrIS SMB) in the NASA Goddard Institute for Space Studies (GISS) ModelE2 General Circulation Model (GCM). GCMs are often limited in their ability to represent SMB compared with polarregion Regional Climate Models (RCMs). We compare ModelE2 simulated GrIS SMB for presentday (19962005) simulations with fixed ocean conditions, at a spatial resolution of 2 latitude by 2.5 longitude (~200 km), with SMB simulated by the Modle Atmosphrique Rgionale (MAR) RCM (19962005 at a 25 km resolution). ModelE2 SMB agrees well with MAR SMB on the whole, but there are distinct spatial patterns of differences and large differences in some SMB components. The impact of changes to the ModelE2 surface are tested, including a subgridscale representation of SMB with surface elevation classes. This has a minimal effect on ice sheetwide SMB, but corrects local biases. Replacing fixed surface albedo with satellitederived values and an agedependent scheme has a larger impact, increasing simulated melt by 60100%. We also find that lower surface albedo can enhance the effects of elevation classes. Reducing ModelE2 surface roughness length to values closer to MAR reduces sublimation by ~50%. Further work is required to account for meltwater refreezing in ModelE2, and to understand how differences in atmospheric processes and model resolution influence simulated SMB

Gauge and matter fields as surfaces and loops - an exploratory lattice study of the Z(3) Gauge-Higgs model

We discuss a representation of the Z(3) Gauge-Higgs lattice field theory at finite density in terms of dual variables, i.e., loops of flux and surfaces. In the dual representation the complex action problem of the conventional formulation is resolved and Monte Carlo simulations at arbitrary chemical potential become possible. A suitable algorithm based on plaquette occupation numbers and link-fluxes is introduced and we analyze the model at zero temperature and finite density both in the weak and strong coupling phases. We show that at zero temperature the model has different first order phase transitions as a function of the chemical potential both for the weak and strong coupling phases. The exploratory study demonstrates that alternative degrees of freedom may successfully be used for Monte Carlo simulations in several systems with gauge and matter fields.Comment: Typos corrected and some statements refined. Final version to appear in Phys. Rev.

Space station impact experiments

Four processes serve to illustrate potential areas of study and their implications for general problems in planetary science. First, accretional processes reflect the success of collisional aggregation over collisional destruction during the early history of the solar system. Second, both catastrophic and less severe effects of impacts on planetary bodies survivng from the time of the early solar system may be expressed by asteroid/planetary spin rates, spin orientations, asteroid size distributions, and perhaps the origin of the Moon. Third, the surfaces of planetary bodies directly record the effects of impacts in the form of craters; these records have wide-ranging implications. Fourth, regoliths evolution of asteroidal surfaces is a consequence of cumulative impacts, but the absence of a significant gravity term may profoundly affect the retention of shocked fractions and agglutinate build-up, thereby biasing the correct interpretations of spectral reflectance data. An impact facility on the Space Station would provide the controlled conditions necessary to explore such processes either through direct simulation of conditions or indirect simulation of certain parameters

Coherent resonant interactions and slow light with molecules confined in photonic band-gap fibers

We investigate resonant nonlinear optical interactions and demonstrate induced transparency in acetylene molecules in a hollow-core photonic band-gap fiber at 1.5$\mu$m. The induced spectral transmission window is used to demonstrate slow-light effects, and we show that the observed broadening of the spectral features is due to collisions of the molecules with the inner walls of the fiber core. Our results illustrate that such fibers can be used to facilitate strong coherent light-matter interactions even when the optical response of the individual molecules is weak.Comment: 5 pages, 4 figure