Is Japan following Europe towards a society of singles? Possible impacts of the rapid increase in life expectancy on Japanese social structure--as seen by a European historical-demographer

The author examines the implications of increasing longevity for social development in Japan. He suggests that Japan is following the example set by Europe, in that almost universal longevity is leading to a focus on individual rather than societal well-being.     

Corporate risk-taking,firm value and high levels of managerial earnings forecasts

We examine the impact of high levels of managerial earnings forecasts, an important form of voluntary disclosure, on corporate risk-taking and firm value. Theory and anecdotal evidence suggest that a policy of high disclosure may reduce managers' willingness to invest in higher-risk, higher-return projects. We first verify, as in prior research, that corporate risk-taking is associated with higher future firm value. We then document a negative relation between firms with high levels of forecasting and corporate risk-taking. Finally, we provide evidence suggesting that high levels of managerial earnings forecasts reduce the positive association between corporate risk-taking and future firm value. Our results are robust to alternative measures of corporate risk-taking and future firm value, and alternative definitions of high levels of managerial earnings forecasts. Our results may be of importance to varying interests as they highlight the potential for high levels of earnings forecasts to inhibit corporate risk-taking and lower firm value.     

Ex post unbalanced tournaments

Tournaments create strong incentives under the assumption that the competition between the agents is balanced. If, at the outset, one agent is stronger than the other, the tournament is ex ante unbalanced and incentives break down. Handicaps can in this case restore incentives. In practice, competing agents are often overall equally strong but have different sorts of strengths. Then, competition will typically be unbalanced ex post and incentives break down, but handicaps cannot be used. We show how a simple means, introducing the possibility of a tie, can often resolve the problem. We examine under what conditions incentives are maximized by ties.     

Insider trading and response to earnings announcements: the impact of accelerated disclosure requirements

This paper contributes to the debate on the consequences of increased disclosure regulation by investigating the effects of expedited reporting requirements of Form 4 filings, mandated by the Sarbanes–Oxley Act (SOX), on the market response to earnings announcements. We first confirm that SOX reduces opportunistic insider trading without deterring insider trading due to diversification needs, and that post-SOX, opportunistic insider trades more strongly reveal upcoming earnings surprises. We then document that, at the earnings announcement date, earnings response coefficients (ERCs) are lower when earnings are preceded by opportunistic insider trades. We conclude that accelerated disclosures of insider transactions mandated by SOX lend to more informationally efficient prices prior to earnings announcements. Our findings stand as one piece of evidence suggesting positive externalities from recent Securities and Exchange Commission (SEC) disclosure regulation and add to the scarce evidence on the consequences of changes in Form 4 filing requirements.     

Monotone imitation dynamics in large populations

We analyze a class of imitation dynamics with mutations for games with any finite number of actions, and give conditions for the selection of a unique equilibrium as the mutation rate becomes small and the population becomes large. Our results cover the multiple-action extensions of the aspiration-and-imitation process of Binmore and Samuelson [Muddling through: noisy equilibrium selection, J. Econ. Theory 74 (1997) 235–265] and the related processes proposed by Benaı¨m and Weibull [Deterministic approximation of stochastic evolution in games, Econometrica 71 (2003) 873–903] and Traulsen et al. [Coevolutionary dynamics: from finite to infinite populations, Phys. Rev. Lett. 95 (2005) 238701], as well as the frequency-dependent Moran process studied by Fudenberg et al. [Evolutionary game dynamics in finite populations with strong selection and weak mutation, Theoretical Population Biol. 70 (2006) 352–363]. We illustrate our results by considering the effect of the number of periods of repetition on the selected equilibrium in repeated play of the prisoner's dilemma when players are restricted to a small set of simple strategies.     

The Effects of Consumer-Directed Health Plans on Health Care Spending

We use unique data from an insurer that exclusively offers high-deductible, "consumer-directed" health plans to identify the effect of plan features, notably employer contributions to the spending account, on health care spending. Our results show that the marginal dollar contributed by the employer to the spending account is entirely spent on outpatient and pharmacy services. In contrast, out-of-pocket spending was not responsive to the amount the employer contributes to the spending account. Our results represent the first plausibly causal estimates of the components of consumer-driven health plans on health spending. The magnitudes of the effects suggest important health care spending consequences to higher employer contributions to spending accounts. Our findings are most directly relevant to health reimbursement arrangement plan designs, though our results are still of value to health savings account plan designs.     

Rapid expansion of overseas banking

Since the mid-sixties the expansion of the overseas banking system of American banks accelerated. New impulses will be generated by the “petroldollars” of the oil producing countries which will most likely be handled by the overseas branches.     

Imitation processes with small mutations

This note characterizes the impact of adding rare stochastic mutations to an “imitation dynamic,” meaning a process with the properties that absent strategies remain absent, and non-homogeneous states are transient. The resulting system will spend almost all of its time at the absorbing states of the no-mutation process. The work of Freidlin and Wentzell [Random Perturbations of Dynamical Systems, Springer, New York, 1984] and its extensions provide a general algorithm for calculating the limit distribution, but this algorithm can be complicated to apply. This note provides a simpler and more intuitive algorithm. Loosely speaking, in a process with K strategies, it is sufficient to find the invariant distribution of a K×K Markov matrix on the K homogeneous states, where the probability of a transit from “all play i” to “all play j” is the probability of a transition from the state “all agents but 1 play i, 1 plays j” to the state “all play j”.     

Exact D-optimal designs for first-order trigonometric regression models on a partial circle

Recently, various approximate design problems for low-degree trigonometric regression models on a partial circle have been solved. In this paper we consider approximate and exact optimal design problems for first-order trigonometric regression models without intercept on a partial circle. We investigate the intricate geometry of the non-convex exact trigonometric moment set and provide characterizations of its boundary. Building on these results we obtain a solution of the exact $D$ -optimal design problem. It is shown that the structure of the optimal designs depends on both the length of the design interval and the number of observations.     

The Choice of Employment Arrangement in the Market for Hospitalist Services

Hospitalists specialize in the management of patients who are hospitalized. Despite a uniformity of work sites, educational backgrounds, and tasks, however, newly available survey data from the American Hospital Association and the Society of Hospital Medicine reveal substantial diversity in employment arrangements. We reconcile these observations by noting that the two principal players on the health care continuum—primary care physicians who refer their patients and hospitals who admit them—have strong but differing motives for using hospitalists. We show how strategic interaction between the two players may give rise to multiple equilibria in which either the primary care physician group or the hospital ends up being the sole employer of hospitalists in a given market. Over time, the growing infrequency of hospitalization and variation in the cost of setting up a hospitalist program may explain the shifting predominance of different employment arrangements.