Interim Stage Research Articles

Risk Aversion and Optimal Reserve Prices in First and Second-Price Auctions, Second Version

This paper analyzes the effects of buyer and seller risk aversion in first and second-price auctions. The setting is the classic one of symmetric and independent private values, with ex ante homogeneous bidders. However, the seller is able to optimally set the reserve price. In both auctions the seller’s optimal reserve price is shown to decrease in his own risk aversion, and more so in the first-price auction. Thus, greater seller risk aversion increases the ex post efficiency of both auctions, and especially that of the first-price auction. The seller’s optimal reserve price in the first-price, but not in the second-price, auction decreases in the buyers’ risk aversion. Thus, greater buyer risk aversion also increases the ex post efficiency of the first but not the second-price auction. At the interim stage, the first-price auction is preferred by all buyer types in a lower interval, as well as by the seller.

Degraded pasture distribution and woody enrichment strategies for pasture fertility preservation in the Bragantina region, north-eastern Amazon

In the densely settled Bragantina region, northern Brazil, smallholder cattle pastures start into compulsory degradation processes indicated, among other factors by the woody encroachment of the resprouting secondary vegetation, nationally called capoeira. By means of Landsat and QuickBird satellite imagery techniques different stages of treedominated pastures were identified and the distribution of degraded pastures quantified. This was tested in a supervised Landsat classification from 2006 and 2007, taking QuickBird imageries from 2004 and 2005 as additional ground checks. We found that 42% of the rural Bragantinian landscape has already converted into pastures, 28% in advanced stages of above ground pasture degradation. Our reclassification means that the region is still confronted with a serious ecological pasture problem and that conventional land use classifications, climatological models and carbon calculations, based on Landsat imageries only, underestimate pasture distribution and thus lead to inaccurate extrapolations. As the resprouting shrubs of the capoeira are a permanent problem on tropical lowland pastures but, on the other hand, are also the ecological basis of the sustainable slash-and-burn systems of smallholders, we tested some innovative strategies to tolerate various useful woody components of the capoeira on pastures to stabilise them ecologically: first, a buffet trial shows that the ten tested capoeira and some other common domesticated tree species obtain a comparable palatability as well-known woody forage legumes. Thus, Cecropia palmata and Tithonia diversifolia, among others, were as palatable for cattle as the well-known multi-purpose legume Cratylia argentea. As a consequence, these freely accessible tree species should not be slashed but fostered on pastures, like supplementary forage plants. Secondly, it is demonstrated that the multi-purpose forage legumes C. argentea and Flemingia macrophylla perform better under smallholder management than under large scaled farming or even intense management due to the associated prolonged restoration times. In sum, we could demonstrate that woody components (capoeira and/ or woody legumes) are more appropriate for the humid tropics than pure grass-monocultures. Based on these experiences, we modified the model of a grass-capoeira-legume pasture, incorporating pastures just as an interim stage of the slash-andburn system. Forage production could be enhanced in that system by selective slashing of the capoeira (palatable species are tolerated) and by incorporating woody forage legumes. As this biome is known to restore its ecosystem fertility rather in its above-ground biomass than in its poor soils, woody components on pastures are recommended for ecologically sustainable production systems. Furthermore, they might be requisite to mitigate the proclaimed climatic change in the Amazon.

Information leakage in innovation outsourcing

This paper studies an R&D outsourcing contract between a firm and a contractor, considering the possibility that in the interim stage, the contractor might sell the innovation to a rival firm. Our result points out that due to the competition in the interim stage, the reward needed to prevent leakage will be pushed up to the extent that a profitable leakage‐free contract does not exist. This result will also apply to cases considering revenue‐sharing schemes and a disclosure punishment for commercial theft. Then, we demonstrate that in a competitive mechanism where the R&D firm hires two contractors together with a relative performance scheme, the disclosure punishment might help and there exists a perfect Bayesian Nash equilibrium where the probability of information leakage is lower and the equilibrium reward is also cheaper than hiring one contractor.

Risk Aversion and Optimal Reserve Prices in First and Second-Price Auctions

This paper analyzes the effects of buyer and seller risk aversion in first and second-price auctions. The setting is the classic one of symmetric and independent private values, with ex ante homogeneous bidders. However, the seller is able to optimally set the reserve price. In both auctions the seller’s optimal reserve price is shown to decrease in his own risk aversion, and more so in the first-price auction. Thus, greater seller risk aversion increases the ex post efficiency of both auctions, and especially that of the first-price auction. The seller’s optimal reserve price in the first-price, but not in the second-price, auction decreases in the buyers’ risk aversion. Thus, greater buyer risk aversion also increases the ex post efficiency of the first but not the second-price auction. At the interim stage, the first-price auction is preferred by all buyer types in a lower interval, as well as by the seller.

Explicit episodic memory for sensory-discriminative components of capsaicin-induced pain: Immediate and delayed ratings

Pain memory is thought to affect future pain sensitivity and thus contribute to clinical pain conditions. Systematic investigations of the human capacity to remember sensory features of experimental pain are sparse. In order to address long-term pain memory, nine healthy male volunteers received intradermal injections of three doses of capsaicin (0.05, 1 and 20 μg, separated by 15 min breaks), each given three times in a balanced design across three sessions at one week intervals. Pain rating was performed using a computerized visual analogue scale (0–100) digitized at 1/s, either immediately online or one hour or one day after injection. Subjects also recalled their pains one week later. Capsaicin injection reliably induced a dose-dependent flare ( p < 0.001) without any difference within or across sessions. The strong burning pain decayed exponentially within a few minutes. Subjects were able to reliably discriminate pain magnitude and duration across capsaicin doses (both p < 0.001), regardless of whether first-time ratings were requested immediately, after one hour or after one day. Pain recall after one week was similarly precise (magnitude: p < 0.01, duration: p < 0.05). Correlation with rating recall after one week was best when first-time ratings were requested as late as one day after injection ( R 2 = 0.79) indicating that both rating retrievals utilized similar memory traces. These results indicate a reliable memory for magnitude and duration of experimentally induced pain. The data further suggest that the consolidation of this memory is an important interim stage, and may take up to one day.

Coordinating under incomplete information

We show that, in a minimum effort game with incomplete information where player types are independently drawn, there is a largest and smallest Bayesian equilibrium, leading to the set of equilibrium payoffs (as evaluated at the interim stage) having a lattice structure. Furthermore, the range of equilibrium payoffs converges to those of the deterministic complete information version of the game, in the limit as the incomplete information vanishes. This entails that such incomplete information alone cannot explain the equilibrium selection suggested by experimental evidence.

Correlated equilibria, incomplete information and coalitional deviations

This paper proposes new concepts of strong and coalition-proof correlated equilibria where agents form coalitions at the interim stage and share information about their recommendations in a credible way. When players deviate at the interim stage, coalition-proof correlated equilibria may fail to exist for two-player games. However, coalition-proof correlated equilibria always exist in dominance-solvable games and in games with positive externalities and binary actions.

Transparency, Inequity Aversion, and the Dynamics of Peer Pressure in Teams: Theory and Evidence

We provide an explanation for peer pressure in teams based on inequity aversion. Analyzing a two‐period model with two agents, we find that the effect of inequity aversion strongly depends on the information structure. When contributions are unobservable, agents act as though they were purely selfish. However, when contributions are made transparent at an interim stage, agents exert higher efforts in the first period and adjust their efforts according to the interim information in the second period. This form of peer pressure reduces free riding, and thus more efficient outcomes are attained. The results are confirmed in a real effort experiment.

A note on budget balance under interim participation constraints: the case of independent types

We provide a simple proof of the equivalence between ex ante and ex post budget balance constraints in Bayesian mechanism design with independent types when participation decisions are made at the interim stage. The result is given an interpretation in terms of efficient allocation of risk.

Informed principal with correlation

In this paper we analyze an adverse selection model with one principal and one agent, who are both risk neutral and have private information. We assume that the private information of the principal is correlated with that of the agent. The main result of the paper is that the principal can extract a larger share of the surplus from the agent than in the case where her information is public. The principal can design such a contract because she exploits the fact that her type is an informative signal on the agent's one. We fully characterize the equilibrium of the game in which different types of principal offer the same menu of contracts that leaves the agent uninformed about the principal's type. This gives more freedom to the principal when setting the transfers because the agent's constraints need to hold only at an interim stage.

Edge-to-Edge Repair of Common Atrioventricular or Tricuspid Valve in Patients With Functionally Single Ventricle

There is a limitation to the ability of the tricuspid or common atrioventricular valve to function in the systemic position, and insufficiency of these valves often carries an important risk during the staged surgical reconstruction in single ventricle. The purpose of this study was to assess the efficacy of edge-to-edge repair, involving suturing of the free-floating segments of the opposing leaflets, applied in this context. Between 1989 and 2006, 49 patients with tricuspid or common atrioventricular valve regurgitation (moderate or greater) associated with single ventricle underwent valve repair 53 times. Edge-to-edge repair was performed in 5 of 23 with tricuspid valve and 17 of 30 with common atrioventricular valve. In the edge-to-edge group, more patients had severe regurgitation (59.1%) compared with the non-edge-to-edge group (32.3%) before operation (p = 0.0906). The postoperative degree of regurgitation was mild or less in 95.5% of the edge-to-edge group compared with 48.4% of the non-edge-to-edge group (p = 0.0003). Tricuspid or atrioventricular valve stenosis was not observed in any of the patients after repair. The degree of regurgitation on follow-up echocardiogram was mild or less in 77.3% of the edge-to-edge group at 2.6 +/- 4.0 years after repair, compared with 38.7% of the non-edge-to-edge group at 1.9 +/- 3.2 years (p = 0.109). Edge-to-edge repair was an effective adjunctive in repairing tricuspid or common atrioventricular valve associated with functionally single ventricle. An excellent reduction of regurgitation was observed in most of the patients, and may lead to preservation of ventricular function during interim stage and successful completion of the Fontan operation.

Stroke prevention in atrial fibrillation – things can only get better

Stroke prevention in atrial fibrillation – things can only get better

Market clearing and price formation

Considered here is decentralized exchange of privately owned commodity bundles. Voluntary transactions take the form of repeated bilateral barters. Under broad and reasonable hypotheses the resulting process converges to competitive equilibrium. Price-taking behavior is not assumed. Prices emerge over time; they need neither be anticipated nor known at any interim stage.

Raba tal: stičišče med okoljem in družbo

Prispevek pojasnjuje rabo zemljišč v kontekstu celovitih družbenih vidikov. Sedanji model razume kot vmesno fazo prostorskih procesov in kot posledico različnih človekovih aktivnosti, torej kot tečaj med družbo in okoljem. Avtor poudarja posledice javne davčne politike in opozarja, da bi morali namesto večplastne diferenciacije prostorskih procesov bolj upoštevati ciljno naravnano politiko rabe zemljišč.

An Analytical Hydrological Model for the Study of Scaling Issues in Land Surface Modeling

Abstract Besides the atmospheric forcing such as solar radiation input and precipitation, the heterogeneity of the surface cover also plays an important role, especially in the distribution characteristics of the latent heat flux (LE). In this study, scaling issues are discussed based on an analytical hydrological model that describes the transpiration and diffusion processes of soil water. The solution of this analytical model is composed of a transient part that depends primarily on initial conditions and a steady part that depends on the boundary conditions. To know how sensitive the different averaging approaches are to the initial conditions, three initial profiles are chosen that cover the prevailing soil moisture regimes. After analyzing its solution, the study shows that 1) upon reaching the steady state, directly taking an average of soil properties will cause systematic overestimation in the calculation of area-averaged LE. For an initially very dry condition, averaging of a sandy soil and a clay soil can cause a percentage error as large as 40%. 2) For vegetation growing on sandy soils, a direct averaging of the transpiration rate results in persistent overestimation of LE. For vegetation growing on clay soil, however, even after reaching the steady state, averaging of two water extraction weights can be either an overestimation or an underestimation, depending on which two vegetation types are involved. 3) During the interim stage of drying down, averaging of the soil/vegetation properties can lead to either an overestimation or an underestimation, depending on the evolving stage of the soil moisture profile. 4) The initial soil moisture condition matters during the transient stage of drying down. Different initial soil moisture conditions yield different scenarios of underestimation and overestimation patterns and a differing severity of errors. The simplicity of the analytical model and the heuristic initial soil profiles make the generalization easier than using sophisticated numerical models and make the causality mechanism clearer for physical interpretations.

Virtual utility and the core for games with incomplete information

The core is extended to games with incomplete information. The feasible set is characterized by incentive-compatible mechanisms. Blocking is organized at the interim stage by an incentive-compatible mediation plan. Membership of the blocking coalition itself may be determined randomly by the blocking mediator. Nonemptiness of an interim fine core is proven for games with a balanced structure, independent types, and sidepayments. An offer of severance payments may be needed to inhibit blocking. Core allocations are characterized in terms of virtual-utility scales that generalize the weighted-utility scales of the inner core. Mechanisms that achieve core allocations are coalitionally durable.

Planning and Analyzing Adaptive Group Sequential Survival Trials

The use of adaptive methods has experienced increasing interest in the current literature on group sequential designs. Group sequential analysis in survival trials usually apply the error spending function approach due to the unpredictable amount of information available in an interim analysis. An alternative way is to apply adaptive methods where additionally the maximum amount of information and other designing parameters can be changed based on the information available at the interim stage. In this paper, it is shown how the inverse normal method can be used within a survival design using the log-rank test for comparing two survival functions. This method allows for many kinds of design modifications. In case of no modifications, the inverse normal method coincides with the commonly used analysis strategy. It is straightforward to specify effect estimates. Confidence intervals for the hazard ratio that can be calculated at each stage of the trial and intervals that can only be computed by the end of the trial are proposed. The latter also enables the calculation of median unbiased estimates. Overall p-values can be defined analogously. Properties of the analyses techniques are investigated and compared with alternative approaches. It is shown that the proposed analysis technique might help to rescue an underpowered study and opens the way to other types of changes in design. The proposed technique is implemented in the software ADDPLAN Adaptive Design, Plans and Analyses (http://www.addplan.com).

A model of interim information sharing under incomplete information

We propose a two-person game-theoretical model to study information sharing decisions at an interim stage when information is incomplete. The two agents have pieces of private information about the state of nature, and that information is improved by combining the pieces. Agents are both senders and receivers of information. There is an institutional arrangement that fixes a transfer of wealth from an agent who lies about her private information. In our model, we show that (1) there is a positive relation between information revelation and the amount of the transfers, and (2) information revelation has a collective action structure, in particular, the incentives of an agent to reveal decrease with respect to the amount of information disclosed by the other.

Reflections on the process of change on acute psychiatric wards during the City Nurse Project

The intention of this paper is to discuss the process of therapeutic change on two acute psychiatric wards during a research project that aimed to reduce conflict and containment. Analysis of fieldwork notes, reflection, team discussion and supervision. The City Nurse Project successfully reduced patient aggression, self-harm and absconding. This paper reports on the reflections made over the course of the year as changes and developments to acute wards took place. Specifically discussed are the beneficial effects of an action research approach, the role of the City Nurse, support for ward managers, education and training, clinical supervision as well as difficulties and barriers to the overall process of change. At an interim stage of the project, the staff have shown a willingness to engage in efforts to change and improve two acute wards. This paper shows the potential to improve acute wards and produce positive outcomes using a working model.

Adaptive and nonadaptive group sequential tests

Methods have been proposed for redesigning a clinical trial at an interim stage in order to increase power. In order to preserve the type I error rate, methods for unplanned design-change have to be defined in terms of nonsufficient statistics, and this calls into question their efficiency and the credibility of conclusions reached. We evaluate schemes for adaptive redesign, extending the theoretical arguments for use of sufficient statistics of Tsiatis & Mehta (2003) and assessing the possible benefits of preplanned adaptive designs by numerical computation of optimal tests; these optimal adaptive designs are concrete examples of optimal sequentially planned sequential tests proposed by Schmitz (1993). We conclude that the flexibility of unplanned adaptive designs comes at a price and we recommend that the appropriate power for a study should be determined as thoroughly as possible at the outset. Then, standard error-spending tests, possibly with unevenly spaced analyses, provide efficient designs, but it is still possible to fall back on flexible methods for redesign should study objective change unexpectedly once the trial is under way.