Reputation from nested activities

Principals usually try to elicit the quality and behavior of agents from their performance. While sometimes success or failure in production does not provide accurate information about the agents, there may be activities not directly related to production that constitute a more precise signal. I show that, when agents face reputation concerns, introducing these activities after a success improves efficiency, while introducing them after a failure reduces efficiency. Hence, nesting activities in the right way may offer a cheap toolbox to provide incentives. As an illustration, I consider a model where reputation concerns drive the hiring decisions of managers in a firm and I show how scapegoating, an activity “nested” after failures in production, generates inefficiencies. While hiring efficient workers increases the probability of success, hiring less efficient workers provides a buffer against reputation loses from failures, since managers can blame them more easily.     

Regulatory design and technical efficiency: public transport in France

The provision of local public transport in France involves private and public firms and the use of incentive contracts to regulate them. We study the effect of these institutional features on the sector’s efficiency using a long panel data of firms, with a two-stage estimation procedure. First, we use nonparametric data envelopment analysis techniques to estimate input usage efficiency, following a conditional approach that controls for differences in the environments in which the firms operate. Second, we estimate semiparametric censored regressions, using fixed effects to control for unobserved sources of heterogeneity. Our results point to a differential effect of private and mixed public-private companies. In particular, having the performance of public operators as the benchmark, efficiency is relatively higher for private firms, but lower when the service is delegated to a mixed public-private firm. In the latter case, the effects diverge by contract type: when the contract is of the cost reimbursement type, performance is lower than the public firm benchmark, while for other contract types, there are no statistically significant differences.     

Sudden Stop and Sudden Flood of Foreign Direct Investment: Inverse Bank Run,Output, and Welfare Distribution

In this paper, I focus on a phenomenon that has not received much attention in the literature, namely that the mere expectation of foreign direct investment (FDI) incentivizes long‐maturity investment projects by domestic residents, and a Sudden Stop when expectations are frustrated. Long‐maturity investment projects enhance productivity but increase the economy's vulnerability to Sudden Stop. The discussion is framed in a context in which a Sudden Stop follows a surge of capital inflows (Sudden Flood), and FDI is concentrated on ongoing projects. A Sudden Stop episode can trigger a fire sale of long‐term assets, output collapse, and welfare redistribution, which is another ignored phenomenon.     

Forecasting emerging technologies: Use of bibliometrics and patent analysis

It is rather difficult to forecast emerging technologies as there is no historical data available. In such cases, the use of bibliometrics and patent analysis have provided useful data. This paper presents the forecasts for three emerging technology areas by integrating the use of bibliometrics and patent analysis into well-known technology forecasting tools such as scenario planning, growth curves and analogies. System dynamics is also used to be able to model the dynamic ecosystem of the technologies and their diffusion. Technologies being forecasted are fuel cell, food safety and optical storage technologies. Results from these three applications help us to validate the proposed methods as appropriate tools to forecast emerging technologies.