A case study for a new metrics for economic complexity: The Netherlands

We present a new approach for the economic analysis of countries, which we apply to the case of the Netherlands. Our study is based on a novel way to quantify exported products’ complexity and countries’ fitness which has been recently introduced in the literature. Adopting a framework in which products are clustered in sectors, we compare the different branches of the export of the Netherlands, taking into account the time evolution of their volumes, complexities and competitivenesses in the years 1995–2010. The High Tech and Life Sciences sectors share high quality products but low competitiveness; the opposite is true for Horticulture and Energy. We analyze in detail the Chemicals sector, finding a declining global complexity which is mostly driven by a shift towards products of lower quality. A growth forecast is also provided. In light of our results we suggest a differentiation in policy between the country’s self-defined industrial sectors.     

Identity, morals, and taboos: beliefs as assets

We develop a theory of moral behavior, individual and collective, based on a general model of identity in which people care about “who they are” and infer their own values from past choices. The model sheds light on many empirical puzzles inconsistent with earlier approaches. Identity investments respond nonmonotonically to acts or threats, and taboos on mere thoughts arise to protect beliefs about the “priceless” value of certain social assets. High endowments trigger escalating commitment and a treadmill effect, while competing identities can cause dysfunctional capital destruction. Social interactions induce both social and antisocial norms of contribution, sustained by respectively shunning free riders or do-gooders.     

Capital Allocation Effects of Financial Reporting Regulation and Enforcement

This paper analyses the effects of stricter financial reporting enforcement on capital allocation and reporting quality in a game-theoretic model and derives conclusions about optimal enforcement strictness. Analysis of the model shows that reporting quality strictly increases with tighter enforcement. However, the effect of stricter enforcement on capital allocation is non-monotonic. Intermediate enforcement strictness results in overdeterrence of viable projects even without costs of compliance. This effect can be alleviated by means of either less or more stringent enforcement.     

Cost-effectiveness of stent-retriever thrombectomy in combination with IV t-PA compared with IV t-PA alone for acute ischemic stroke in the UK

Objective: To evaluate the cost-effectiveness of neurothrombectomy with a stent retriever (Solitaire**Solitaire Revascularization Device is a registered trademark of Medtronic (Irvine, CA).View all notes Revascularization Device) in treating acute ischemic stroke patients from the UK healthcare provider perspective.

Methods: A Markov model was developed to simulate health outcomes and costs of two therapies over a lifetime time horizon: stent-retriever thrombectomy in combination with intravenous tissue-type plasminogen activator (IV t-PA), and IV t-PA alone. The model incorporated an acute phase (0–90 days) and a rest of life phase (90+ days). Health states were defined by the modified Rankin Scale score. During the rest of life phase, patients remained in the same health state until a recurrent stroke or death. Clinical effectiveness and safety data were taken from the SWIFT PRIME study. Resource use and health state utilities were informed by published data.

Results: Combined stent-retriever thrombectomy and IV t-PA led to improved quality-of-life and increased life expectancy compared to IV t-PA alone. The higher treatment costs associated with the use of stent-retriever thrombectomy were offset by long-term cost savings due to improved patient health status, leading to overall cost savings of £33 190 per patient and a net benefit of £79 402. Deterministic and probabilistic sensitivity analyses demonstrated that the results were robust to a wide range of parameter inputs.

Limitations: The acute and long-term costs resource use data were taken from a study based on a patient population that was older and may have had additional comorbidities than the SWIFT PRIME population, resulting in costs that may not be representative of the cohort within this model. In addition, the estimates may not reflect stroke care today as no current evidence is available; however, the cost estimates were deemed reasonable by clinical opinion.

Conclusions: Combined stent-retriever neurothrombectomy and IV t-PA is a cost-effective treatment for acute ischemic stroke compared with IV t-PA alone.     

Simple sequencing problems with interdependent costs

In this paper we analyze simple sequencing problems under incomplete information and interdependent costs. We prove the necessity of concave cost function for implementability of such problems. Implementability means that one can achieve aggregate cost minimization in ex-post equilibrium. We also show that simple sequencing problems are implementable if and only if the mechanism is a ‘generalized VCG mechanism.’ We then consider first best implementability, that is implementability with budget balancing transfer. We prove that for implementable n agent simple sequencing problems, with polynomial cost function of order (n−2) or less, one can achieve first best implementability. Finally, for the class of implementable simple sequencing problems with “sufficiently well behaved” cost function, this is the only first best class.     

Contracting with imperfect commitment and noisy communication

This paper provides new analytical tools for studying principal-agent problems with adverse selection and limited commitment. By allowing the principal to use general communication devices we overcome the literature's common, but overly restrictive focus on one-shot, direct communication. In addition, general communication devices solve two fundamental problems of contracting with imperfect commitment: First, they allow us to identify the ‘local downward’ incentive constraints as the relevant ones if the agent's preferences satisfy a single-crossing property. Second, we show how one may restrict the cardinality of the message spaces of the communication device. An example illustrates our arguments and the suboptimality of one-shot, direct communication.