Exit Option Research Articles

The right to move and the right to exclude: Ilya Somin and ‘foot voting’

The right to move and the right to exclude: Ilya Somin and ‘foot voting’

Using Markov Models to Characterize and Predict Process Target Compliance

Processes are everywhere, covering disparate fields such as business, industry, telecommunications, and healthcare. They have previously been analyzed and modelled with the aim of improving understanding and efficiency as well as predicting future events and outcomes. In recent years, process mining has appeared with the aim of uncovering, observing, and improving processes, often based on data obtained from logs. This typically requires task identification, predicting future pathways, or identifying anomalies. We here concentrate on using Markov processes to assess compliance with completion targets or, inversely, we can determine appropriate targets for satisfactory performance. Previous work is extended to processes where there are a number of possible exit options, with potentially different target completion times. In particular, we look at distributions of the number of patients failing to meet targets, through time. The formulae are illustrated using data from a stroke patient unit, where there are multiple discharge destinations for patients, namely death, private nursing home, or the patient’s own home, where different discharge destinations may require disparate targets. Key performance indicators (KPIs) of this sort are commonplace in healthcare, business, and industrial processes. Markov models, or their extensions, have an important role to play in this work where the approach can be extended to include more expressive assumptions, with the aim of assessing compliance in complex scenarios.

On Incentive Compatibility in Dynamic Mechanism Design With Exit Option in a Markovian Environment

This paper studies dynamic mechanism design in a Markovian environment and analyzes a direct mechanism model of a principal-agent framework in which the agent is allowed to exit at any period. We consider that the agent’s private information, referred to as state, evolves over time. The agent makes decisions of whether to stop or continue and what to report at each period. The principal, on the other hand, chooses decision rules consisting of an allocation rule and a set of payment rules to maximize her ex-ante expected payoff. In order to influence the agent’s stopping decision, one of the terminal payment rules is posted-price, i.e., it depends only on the realized stopping time of the agent. This work focuses on the theoretical design regime of the dynamic mechanism design when the agent makes coupled decisions of reporting and stopping. A dynamic incentive compatibility constraint is introduced to guarantee the robustness of the mechanism to the agent’s strategic manipulation. A sufficient condition for dynamic incentive compatibility is obtained by constructing the payment rules in terms of a set of functions parameterized by the allocation rule. The payment rules are then pinned down up to a constant in terms of the allocation rule by deriving a first-order condition. We show cases of relaxations of the principal’s mechanism design problem and provide an approach to evaluate the loss of robustness of the dynamic incentive compatibility when the problem solving is relaxed due to analytical intractability. A case study is used to illustrate the theoretical results.

Unpacking ambiguity in ideational change: the polysemy of the ‘Europe of Knowledge’

What is ambiguity, and why does it matter in policy change? Often treated as an exogenous factor, the ambiguity of ideas has been considered a taken for granted entity instrumental to actors’ strategic action. Less attention has been devoted to elucidating the nature and drivers of ambiguity in the policy process. Building on the concept of ‘boundary objects’, originally developed within the sociology of science, this article identifies polysemy as one explanatory factor through which multiple and contradictory meanings are shared across a constellation of different actors. Empirically, the article examines how the idea of the ‘Europe of Knowledge’ in European education policy was first rejected in the mid-1990s and then adopted only a few years later thanks to its polysemy. By ‘objectifying’ an idea into a boundary object, polysemy can thus create entry or exit options in the institutional arena by legitimising actors’ cooperation and enabling (policy) entrepreneurship.

Perceptions of the state of health services and the Brexit vote

The reasons behind the Brexit have been extensively analysed. Different studies have focused on factors as diverse as age, education, ethnicity, income, social class, unemployment, religion, immigration, and the support for parties and leaders, amongst others. No work has however studied the impact of perceptions of the quality of health services. This void is surprising because the Brexiteers repeatedly (and misleadingly) promised that 350 million pounds a week would be spent on the National Health Service (NHS) should the exit option triumph. As people who perceive health services to be bad might benefit from a better endowed NHS, we expect them to show a higher propensity to vote leave. Our results provide strong support for this, even when a wide array of controls is considered. This finding constitutes an original contribution to a crucial international political issue and stresses the importance of perceptions and fake news for voting behaviour.

Mujeres Unidas: Addressing Substance Use, Violence, and HIV Risk through Asset-Based Community Development for Women in the Sex Trade.

This paper examines the prevalence of and potential for community mobilization (CM) and its association with HIV/STI risk, substance use, and violence victimization among women, particularly those using substances, in the sex trade in Tijuana, Mexico. Methods: 195 women participated in Mujeres Unidas (K01DA036439 Urada) under a longitudinal survey study, “Proyecto Mapa de Salud” (R01DA028692, PI: Brouwer). Local health/social service providers (N = 16) were also interviewed. Results: 39% of women who participated in community mobilization activities used substances. In adjusted analyses (n = 135), participation in CM activities (n = 26) was more likely among women who did not report substance use (AOR: 4.36, CI: 1.11–17.16), perceived a right to a life free from violence (AOR: 9.28, CI: 2.03–59.26), talked/worked with peers in the sex trade to change a situation (AOR: 7.87, CI: 2.03–30.57), witnessed violence where they worked (AOR: 4.45, CI: 1.24–15.96), and accessed free condoms (AOR: 1.54, CI: 1.01–2.35). Forty-five of the women using substances demonstrated their potential for engaging in asset-based community development (ABCD) with service providers in Mujeres Unidas meetings. Conclusion: Women using substances, vs. those who did not, demonstrated their potential to engage in ABCD strategies. Women’s empowerment, safety, and health could be enhanced by communities engaging in ABCD strategies that build and bridge social capital for marginalized women who otherwise have few exit and recovery options.

Effect of the group size on the evolution of cooperation when an exit option is present

The evolution of cooperation has been one of the main topics in evolutionary biology. If cooperators maintain interaction with cooperators and halt interaction with defectors, then cooperation can pay and can be favored by natural selection. This is called an exit option. Here, not only cooperation in dyadic interactions but also cooperation in sizable groups can be observed. Rivalry is about whether usage of the benefit by one individual reduces its availability to others or not. A common good is a rivalrous good, whereas a public good is a non-rivalrous good. In this paper, by analyzing n-player prisoner’s dilemma games, we examine whether the effect of the group size on cooperation is positive or negative in the context of exit option. When goods are common goods, defectors always dominate cooperators when the group size is infinitely large. Thus, the group size has only negative effects on the evolution of cooperation when goods are common goods. In contrast, when goods are public goods, an increase in group size has positive effects as well as negative effects on the evolution of cooperation. In addition, we reveal that it has both positive and negative effects on the evolution of cooperation for cooperators to tolerate some defection and hope to keep the interaction.

Context and Implications Document for: Recruitment to STEM studies: The roles of curriculum reforms, flexibility of choice, and attitudes

Context and Implications Document for: Recruitment to STEM studies: The roles of curriculum reforms, flexibility of choice, and attitudes

Treatment Exit Options for Non-infectious Uveitis (TOFU): Study Protocol for a Prospective Clinical Registry

ABSTRACT Purpose Currently, there is limited evidence regarding clinical management of non-anterior non-infectious uveitis including treatment outcomes of disease-modifying anti-rheumatic drugs (DMARDs) and their combinations. Treatment guidelines or recommendations on preferred choice of DMARD combinations and reduction and/or discontinuation strategies in quiescent uveitis are lacking. The TOFU (Treatment exit options for non-infectious uveitis) registry aims to document disease courses and to provide recommendations on DMARD treatment exit strategies. Methods The registry is an observational, non-commercial, and non-interventional study and targets patients who are ≥18 years of age with non-infectious uveitis of the posterior segment or retinal vasculitis on or starting DMARD treatment. Data are entered prospectively at study sites through a web-based interface into electronic case report forms (eCRF) implemented in the electronic data capture software RedCap (Version 9, Vanderbilt University, USA). The collated data include ophthalmological, general medical history and patient-reported outcomes (PROs). Assessment of uveitis classification and activity follows the international Standardization of uveitis nomenclature (SUN) criteria. Patient appointment and treatment decisions remain at the discretion of the managing physician and are completely independent of participation in the registry. The study follows the tenets of the declaration of Helsinki. Conclusions The TOFU registry captures real-life data of patients with non-infectious uveitis of the posterior segment, involving both medical personnel and patients. The study adheres to international standards and will provide important evidence and guidance in the development of guidelines.

Self-Organized Crowd Dynamics: Research on Earthquake Emergency Response Patterns of Drill-Trained Individuals Based on GIS and Multi-Agent Systems Methodology.

Predicting evacuation patterns is useful in emergency management situations such as an earthquake. To find out how pre-trained individuals interact with one another to achieve their own goal to reach the exit as fast as possible firstly, we investigated urban people’s evacuation behavior under earthquake disaster coditions, established crowd response rules in emergencies, and described the drill strategy and exit familiarity quantitatively through a cellular automata model. By setting different exit familiarity ratios, simulation experiments under different strategies were conducted to predict people’s reactions before an emergency. The corresponding simulation results indicated that the evacuees’ training level could affect a multi-exit zone’s evacuation pattern and clearance time. Their exit choice preferences may disrupt the exit options’ balance, leading to congestion in some of the exits. Secondly, due to people’s rejection of long distances, congestion, and unfamiliar exits, some people would hesitant about the evacuation direction during the evacuation process. This hesitation would also significantly reduce the overall evacuation efficiency. Finally, taking a community in Zhuhai City, China, as an example, put forward the best urban evacuation drill strategy. The quantitative relation between exit familiar level and evacuation efficiency was obtained. The final results showed that the optimized evacuation plan could improve evacuation’s overall efficiency through the self-organization effect. These studies may have some impact on predicting crowd behavior during evacuation and designing the evacuation plan.

Innovators' gains from incumbents' exit options in R&D alliances: A reconciliation of real options and transaction costs logics

AbstractResearch summaryThe transaction costs logic suggests that innovators cannot gain value from incumbents' unconditional termination rights in their R&D alliances with them because incumbents use these rights either to protect their own interests or as bargaining chips ex post. By contrast, the real options logic suggests that innovators can gain value from these rights because they provide them with an opportunity to release their resources from their troubled alliances. We reconcile the two logics by showing that incumbents' unconditional termination rights are their exit options in their R&D alliances and they are value‐enhancing for innovators; yet, innovators' gains from them depend on the likelihood of their opportunistic uses by incumbents at their exercises. The tests in the biopharmaceutical R&D alliances setting support our hypotheses.Managerial summaryIncumbents form R&D alliances with innovators to explore new technologies and innovators join these alliances to commercialize their technologies. Yet, innovators typically possess alternative commercialization options activated once their alliances are terminated. In such R&D intensive alliances, granting unconditional termination rights to incumbents help innovators gain value from their R&D alliances. This is because incumbents' unconditional termination rights operate as their exit options and they enable easy and timely terminations of R&D alliances. This, in turn, allows innovators not to persist in troubled R&D alliances and to begin with exploring alternative commercialization options. However, the likelihood of opportunism at exit option exercises matters. The innovators' gains from exit options are likely to be higher as partner‐specific alliance experience increases because the joint history mitigates opportunism.

Is Free Movement of People Subverting Democracy in Europe? A Hirschmanian Hypothesis

Mobility within the EU is normally understood as economic: a flow from poor members from Central and Eastern Europe (CEE) to the wealthier West which recently replaced a similar flow from the poorer South to the North. It is rarely noticed, however, that the same flows represent also movement from lower quality democracies to higher quality ones. If so, it is plausible to expect that this movement, on a scale unseen in Europe since WWII, will have some feedback effect on the quality of democracy too. Indeed, as we know from Albert Hirschman, citizens are facing a perennial dilemma between ‘voice’ and ‘exit’. The other choice they have to make according to him is between investing their time and energy in actions in the public sphere and pursuit of private welfare. By facilitating the exit option on one side and enhancing the opportunities for private prosperity on the other, the Union, for all the great things it provides, may subvert democracy in the member states. This effect may be negligible in most of the ‘old’ member states which have not seen significant outward migration but it should be very strong in the ‘new’ member states in the East. Thus, the paper aims to initiate the systematic exploration of the relationship between emigration and democratic backsliding which is currently the most characteristic trend in CEE. It begins by an exploration of the dynamics of mobility, participation and private welfare which may (or may not) come into play in the context of European integration and of the free movement of people in particular. This is followed by a brief discussion of the available evidence for the relationship between mobility and political participation – all of it from other contexts. It concludes with an argument that the EU ought to compensate its adverse effect on domestic democracy and (very briefly) discusses the types of measures which could remedy the problem.

Testing Hirschman’s exit, voice, and loyalty model: citizen and provider responses to decline in public health services

Dissatisfied users of public services may choose to voice or exit. But when does voice emerge? To answer this question, we deploy Hirschman’s exit, voice, and loyalty (EVL) model. We set out an ‘available alternatives’ hypothesis—increasing the number of exit options reduces voice—in contrast to an ‘effective voice’ hypothesis where voice is lower when there is no choice. We expect the exit-voice relationship to be moderated by loyalty; and providers that respond to user voice improve satisfaction and reduce exit. We evaluate these hypotheses in a survey experiment on publicly funded doctors’ services in the UK. We find no effects of the number of exit options on voice, nor evidence for loyalty as a moderator. A response by the provider results in higher satisfaction and lower intention to exit, strengthened by loyalty. Providers can promote satisfaction and discourage users moving to alternative providers by responding to voice.

Exit rights open complex pathways to cooperation

We study the evolutionary dynamics of the Prisoner's Dilemma game in which cooperators and defectors interact with another actor type called exiters. Rather than being exploited by defectors, exiters exit the game in favour of a small pay-off. We find that this simple extension of the game allows cooperation to flourish in well-mixed populations when iterations or reputation are added. In networked populations, however, the exit option is less conducive to cooperation. Instead, it enables the coexistence of cooperators, defectors, and exiters through cyclic dominance. Other outcomes are also possible as the exit pay-off increases or the network structure changes, including network-wide oscillations in actor abundances that may cause the extinction of exiters and the domination of defectors, although game parameters should favour exiting. The complex dynamics that emerges in the wake of a simple option to exit the game implies that nuances matter even if our analyses are restricted to incentives for rational behaviour.

Venture Capital in the Rise of Sustainable Investment

In recent years, the world has witnessed a soaring inflow of capital into sustainable investment. This is particularly so following the devastating COVID-19 pandemic. However, while a growing size of literature has deliberated debt financing in sustainable investment, less ink has been spilt on equity financing in this space, and even less scholarship has explored the role of government and law in facilitating sustainable Venture Capital (“VC”) funds. This paper proposes a dualist approach towards facilitating the development of sustainable VC funds encompassing a contractarian strategy with government support. The contractarian approach includes effective contracting covering the entire VC cycle in sustainable investment. It aims to provide strong incentives for all participants, ranging from investors, entrepreneurs, fund managers, to credit-rating agencies and evaluation firms. In the same vein, this paper seeks to craft a role for regulators that facilitates the simultaneous availability of several factors in a sustainable VC cycle (i.e., fund-raising, investment and exit). In the fund-raising stage, governments may play an active role by expanding the source of financing for sustainable VC funds and enacting detailed and targeted legislations. For the VC investment stage, sustainable VC funds should make full use of its strong corporate governance rights and monitoring to ensure that start-ups deliver their sustainable promises. In the exit stage, a specialized sustainability board is strongly recommended to offer viable exit options, together with greater standardization and comparability in sustainability information disclosure, and regulatory support for trustworthy sustainable impact rating agencies to sustain investor confidence.

The Illiberal Challenge in the EU: Exploring the Parallel with Illiberal Minorities and the Example of Hungary

The long history of liberal multiculturalist theories grappling with the challenge posed by illiberal minorities – Parallel with the illiberal challenge in the European Union – Differences between the state/minority focus, the cultural/political considerations, the individual/systemic violations – Why these do not undermine the parallel – Propositions from multiculturalist theories to draw the line between toleration and legitimate interference – Severity, internal consensus, the exit option, and historical agreements – Forms of engagement to strengthen coherence, fairness, and solidarity

Firm Exit during the COVID-19 Pandemic: Evidence from Japan

Firms have exited the market since the start of the COVID-19 pandemic. To evaluate the number of firms exiting the market and their exit rate, we construct a simple model, in which firms optimally choose stopping time for their exit. We estimate the model using firm-level data on firm exits before the pandemic. Subsequently, using recent survey data on firm sales growth, we simulate potential firm exits during the pandemic under the condition that the institutional background, represented by activities such as bankruptcy procedures and government rescue plans, did not change the exit option value. Our main findings are as follows. First, we find sizable heterogeneity with respect to the number and rate of firm exits across industries and regions. Second, in aggregate, the pandemic potentially increased firm exits by around 20% compared to the previous year under the assumption that the recent reduction in firm sales is temporary and, thus, partially incorporated into firms’ expectations for future trend sales growth. In two extreme cases in which the recent sales reduction has a full or no impact on firms’ expectations for future sales, firm exits increased by 110% and 10%, respectively. Third, these increases are mainly due to the decrease in the expected sales growth rate, rather than the increase in uncertainty. Finally, we quantify the hypothetical amount of government subsidies needed to prevent excess increases in potential firm exits, which is around 10−3 of Japan’s GDP.

Constitutional and Procedural Pathways to Freedom from Immigration Detention: Increasing Access to Legal Representation

Each day, tens of thousands of noncitizens are caged in immigration prisons and jails across the United States. Locked up and separated from their families and the outside world, detained noncitizens experience the pain and suffering associated with criminal incarceration without many of the same salient procedural safeguards. One of the most crucial missing protections is access to legal representation. Empirical studies show that legal representation makes all the difference in allowing noncitizens to challenge their imprisonment and gain freedom. Yet, the vast majority of detained noncitizens never receive legal representation. As a result, for many people in immigration detention, the only conceivable exit options are those worse than detention itself: deportation or death.Despite legal scholarship arguing for a right to appointed counsel in removal proceedings, comparatively little attention has been devoted to access to legal representation for the specific purpose of seeking freedom from detention. This Article aims to fill that gap by examining two structural pathways to increasing access to legal representation for people seeking release from immigration detention. First, the Due Process Clause of the Fifth Amendment demands a right to appointed counsel for the purpose of challenging detention (the “constitutional pathway”). A direct application of the procedural due process test established in Mathews v. Eldridge and expounded in Turner v. Rogers provides sufficient justification to extend the right to appointed counsel to individuals in immigration detention. Although courts have yet to recognize a constitutional right to appointed counsel in criminal bail hearings, the comparative dearth of procedural protections in immigration detention proceedings justifies identifying the right in that context. Second, “legal representation” is not limited to each detainee getting her own lawyer: the class action, a device that allows a small group of detained noncitizens to litigate on behalf of a larger group of detainees, is a powerful, but underappreciated, tool for allowing detained noncitizens their day in court (the “procedural pathway”). Two recent developments—specifically Justice Alito’s dicta on the viability of the class device in Jennings v. Rodriguez and debates over whether the Immigration and Nationality Act prohibits classwide injunctions—threaten the existence and efficacy of class actions in the context of immigration detention. The first, questioning the class device’s viability, mistakenly conflates the flexible nature of due process with the requirements for class certification. The second, doubting the permissibility of classwide injunctions, reveals that the only relief available for the class may be declaratory in nature, which often falls short of the relief detainees most need.Immigration detention is unique among the crises currently plaguing the U.S. immigration system. The impact of the coronavirus pandemic on people in detention has only made this problem more apparent. Access to legal representation is crucial to prevent unlawful imprisonment, lessen the economic and human costs of detention, and fight forces of xenophobia and racial prejudice that have influenced immigration law’s understanding of “who belongs” for far too long. In tandem, the constitutional and procedural pathways chart two broad solutions, present benefits and limitations, and raise further ideas for roads to a fairer, more just system.

Enfranchising the disenfranchised: should refugees receive political rights in liberal democracies?

ABSTRACT Should refugees receive political rights in liberal democracies? I argue that they should. Refugees are special – at least when it comes to claims towards democratic inclusion. They lack exit options and are significantly impacted by decisions made in liberal democracies. Enfranchisement is a matter of urgency to them and should occur on a national level. But what justifies the democratic inclusion of refugees? I draw on the all-subjected principle in arguing that all those subjected to rule in a political unit should have a say in such rule. I show that refugees cannot be denied democratic inclusion based on the argument that transients should be excluded from participation. Refugees are not transients. Finally, I show that naturalization is not a prerequisite for enfranchisement. Political rights and citizenship can be had independently of each other. Refugees, then, should be nationally enfranchised as soon as they receive refugee status.

Agency problems in public-private partnerships investment projects

This paper examines concession contracts between a private firm and a government in the presence of moral hazard within a real-options framework. The design of optimal contracts to provide incentives to the private firm to exert effort is analyzed. We show that although first-best investment timing can be implemented, contracts often do not provide firms with proper incentives to exert effort, resulting in high-cost projects being undertaken. This problem can be alleviated through the use of a monitoring technology that imposes a penalty on the shirking firm. Although monitoring distorts the investment timing leading to a delayed investment, it increases the government’s profits at the expense of the firm, so that the government finds it optimal to induce effort exertion, increasing the likelihood of low-cost projects. Considering jointly incentives and an exit option, we show that the regular compensation of firms and their compensation upon termination act as substitutes in providing incentives. Governments should set these remunerations jointly in order to minimize the cost of a bailout option for the society.