Equilibrium dominance in experimental financial markets

We examine the predictive power of equilibrium dominance inexperimental markets where firms with investment opportunitieshave an informational advantage over potential investors andare permitted to purchase a money-burning signal. Equilibriumdominance often fails to predict well when a Pareto-superiorsequential equilibrium is also available. Instead, equilibriumselection appears to be related to the potential earnings ofa more valuable firm that can signal its type successfully bydefecting from the sequential equilibrium.     

Latino families report lower child injury rates than white families

Latino children have lower visit rates to emergency departments and primary care physicians than white children in the USA. Using a nationally representative household survey, this study asked whether parental report of injury was also lower for Latino children, after adjusting for demographic, socioeconomic, health status and health care access factors. Data were obtained on injuries for which medical advice or treatment was received from the National Health Interview Survey (NHIS) from 1997 to 2003. Using the multistage probability design of NHIS, annual rates and adjusted odds of childhood injury report by race and ethnicity were calculated. Respondents reported lower rates of injury for Latino children (6.0 (95% CI 5.3-6.8)/100 person-years) than white children (13.4 (12.7-14.2)/100 person-years). Lower injury rates were mainly due to lower rates of sports injuries and accidental falls. Latino children had lower odds of reported injury than white children, even after adjusting for multiple factors (odds ratio 0.7; 95% CI 0.6-0.8). Lower odds of injury report among Latino children are independent of direct measures of demographic, socioeconomic, health status and health care access factors and indirect measures of acculturation including respondent language and country of origin. Potential explanations include lower exposure to risk, greater child supervision, reporting bias, differences in cultural attitudes toward seeking of health care and reduced health care access that cannot be explored in NHIS due to the form of the current questions. Further research is needed to investigate cultural differences in risk exposure, child supervision and seeking of injury care.     

Pooling, separating, and semiseparating equilibria in financial markets: some experimental evidence

This study investigates experimental financial markets in whichfirms possess more information than do potential investors.Firms were given opportunities to undertake positive net presentvalue projects which they could either forgo or finance by sellingequity. Auctions were conducted among the investors for theright to finance the projects. When the theoretical equilibriumwas unique, theory predicted well. When theory permitted pooling,separation, and semiseparation, only the more efficient poolingequilibrium was observed. The domination of the pooling equilibriumwas robust to different experimental experiences by participants.When available, signals were used by good firms to distinguishthemselves from bad.