Going Public without Governance: Managerial Reputation Effects

This paper addresses the agency problem between controlling shareholders and minority shareholders. This problem is common among public firms in many countries where the legal system does not effectively protect minority shareholders against oppression by controlling shareholders. We show that even without any explicit corporate governance mechanisms protecting minority shareholders, controlling shareholders can implicitly commit not to expropriate them. Stock prices of such companies are significantly higher and firms are more likely go public because of this reputation effect. Moreover, insiders divest shares gradually over time, at a rate that is negatively related to the degree of moral hazard.     

Finite Horizon Bargaining and the Consistent Field

We explore the relationships between noncooperative bargaining games and the consistent value for nontransferable utility (NTU) cooperative games. A dynamic approach to the consistent value is introduced: the consistent vector field. The main contribution is to establish that theconsistent fieldis intimately related to the concept ofsubgame perfectionfor finite horizon noncooperative bargaining games, as the horizon goes to infinity and the cost of delay goes to zero. We then show that in the general NTU case—unlike the transferable utility and pure bargaining cases—the finite horizon subgame perfect equilibria need not approach the consistent value.Journal of Economic LiteratureClassification Numbers: C71, C72.     

Strategies for fiscal consolidation in Japan

Japan's key fiscal challenge is to put public finances on a more sustainable footing. This paper investigates the macroeconomic implications of alternative fiscal strategies for Japan using the IMF's Global Fiscal Model. The results suggest that (i) an adjustment package that achieves primary balance through lower social transfers and government spending and a higher VAT is the most viable option and has a smaller negative impact on growth than other fiscal measures; (ii) achieving primary balance is not sufficient to stabilize the net debt ratio; (iii) prefunding future aging costs provides greater long-term benefits compared with less front-loaded strategies; (iv) tax reform involving shifting from corporate taxation to consumption taxation could mitigate the short-term output losses associated with fiscal consolidation; (v) the spillovers to the rest of the world from consolidation in Japan are positive in the medium term, but modest.     

Educational Attainment and Regional Economic Performance in Mexico

A growing number of studies confirm the importance of educational attainment and human capital investment as a means for improving per capita income performance. In developing countries, attention to this linkage has primarily been carried out using national data aggregates. For relatively large countries such as Mexico, it is helpful to conduct similar analyses that document regional market income patterns. This paper utilizes 2000 census data for all 31 states and the Federal District in Mexico City to quantify regional income performance. Similar to other studies conducted using regional data in higher income economies, results confirm strong links between education and incomes across Mexico.     

Do Repeated Wildfires Change Homebuyers’ Demand for Homes in High-Risk Areas? A Hedonic Analysis of the Short and Long-Term Effects of Repeated Wildfires on House Prices in Southern California

Unlike most hedonic studies that analyze the effects of a one-time event, this paper analyzes the effects of forest fires that are several years apart in a small geographical area. We find that repeated forest fires cause house prices to decrease for houses located near the fires. We test and reject the hypothesis that the house price reduction from one fire is equal to the house price reduction from a second fire. The first fire reduces house prices by about 10%, while the second fire reduces house prices by nearly 23%, a statistically significant difference. The pattern of these results are robust to several alternative econometric specifications.

Valuations and dynamics of negotiations

This paper analyzes three‐party negotiations in the presence of externalities. We obtain a closed‐form solution for the Markov perfect equilibrium of a multilateral non‐cooperative bargaining model, yielding an equilibrium value and dynamics of negotiations that are supported by experimental studies. Players’ values are monotonically increasing (or decreasing) in the amount of negative (or positive) externalities that they impose on others. Moreover, players’ values are continuous and piecewise linear on the worth of bilateral coalitions, and are inextricably related to their negotiation strategies: the equilibrium value is the Nash bargaining solution when no bilateral coalitions form; the Shapley value when all bilateral coalitions form; or the nucleolus, when either one bilateral coalition among “natural partners” or two bilateral coalitions including a “pivotal player” form.     

Estimated burden of cardiovascular disease and value-based price range for evolocumab in a high-risk,secondary-prevention population in the US payer context

Aim: To estimate real-world cardiovascular disease (CVD) burden and value-based price range of evolocumab for a US-context, high-risk, secondary-prevention population.

Materials and methods: Burden of CVD was assessed using the UK-based Clinical Practice Research Datalink (CPRD) in order to capture complete CV burden including CV mortality. Patients on standard of care (SOC; high-intensity statins) in CPRD were selected based on eligibility criteria of FOURIER, a phase 3 CV outcomes trial of evolocumab, and categorized into four cohorts: high-risk prevalent atherosclerotic CVD (ASCVD) cohort (n?=?1448), acute coronary syndrome (ACS) (n?=?602), ischemic stroke (IS) (n?=?151), and heart failure (HF) (n?=?291) incident cohorts. The value-based price range for evolocumab was assessed using a previously published economic model. The model incorporated CPRD CV event rates and considered CV event reduction rate ratios per 1?mmol/L reduction in low-density lipoprotein-cholesterol (LDL-C) from a meta-analysis of statin trials by the Cholesterol Treatment Trialists Collaboration (CTTC), i.e. CTTC relationship.

Results: Multiple-event rates of composite CV events (ACS, IS, or coronary revascularization) per 100 patient-years were 12.3 for the high-risk prevalent ASCVD cohort, and 25.7, 13.3, and 23.3, respectively, for incident ACS, IS, and HF cohorts. Approximately one-half (42%) of the high-risk ASCVD patients with a new CV event during follow-up had a subsequent CV event. Combining these real-world event rates and the CTTC relationship in the economic model, the value-based price range (credible interval) under a willingness-to-pay threshold of $150,000/quality-adjusted life-year gained for evolocumab was $11,990 ($9,341–$14,833) to $16,856 ($12,903–$20,678) in ASCVD patients with baseline LDL-C levels ≥70?mg/dL and ≥100?mg/dL, respectively.

Conclusion: Real-world CVD burden is substantial. Using the observed CVD burden in CPRD and the CTTC relationship, the cost-effectiveness analysis showed that, accounting for uncertainties, the expected value-based price for evolocumab is higher than its current annual cost, as long as the payer discount off list price is greater than 20%.     

Hybrid structures: innovative governance,judicial and sociological approaches

Quality & Quantity - The aim of this study is to examine the new trends in the hybridity research area and clarify the convergence of interests among state actors, private actors and civil...     

Language–Related Differences in a Contingent Valuation Study: English versus Spanish

To test the similarity of English– and Spanish–speaking households responses to a contingent valuation survey, phone interviews were conducted in both languages regarding two forest fire prevention programs. While there were similar response rates, there were significant differences in the most frequent reasons given for refusing to pay. In the pooled logit model, the language intercept and bid interaction variables were insignificant in both programs. The likelihood ratio test of separate logit equations showed no statistical difference between English– and Spanish–speaking households responses to either program. Mean benefits reported by Spanish–speaking households were about one–third lower than English–speaking households, although the difference is not statistically significant.