ESG Integration and the Investment Management Process: Fundamental Investing Reinvented

We investigate how conventional asset managers account for environmental, social, and governance (ESG) factors in their investment process. We do so on the basis of an international survey among fund managers. We find that many conventional managers integrate responsible investing in their investment process. Furthermore, we find that ESG information in particular is being used for red flagging and to manage risk. We find that many conventional fund managers have already adopted features of responsible investing in the investment process. Furthermore, we argue and show that ESG investing is highly similar to fundamental investing. We also reveal that there is a substantial difference in the ways in which U.S. and European asset managers view ESG.     

Auctions with Financial Externalities

We study auctions with financial externalities, i.e., auctions in which losers care about how much the winner pays. In the first-price auction, larger financial externalities result in a lower expected price; in the second-price auction, the effect is ambiguous. Although the expected price in the second-price auction may increase if financial externalities increase, the seller is not able to gain more revenue by guaranteeing the losers a fraction of the auction revenue. With a reserve price, we find that both auctions may have pooling at the reserve price. This finding suggests that identical bids need not be a signal of collusion, in contrast to what is sometimes argued in anti-trust cases. We gratefully acknowledge financial support from the Dutch National Science Foundation (NWO 510.010.501 and NWO-VICI 453.03.606). For valuable discussions and comments, we would like to thank Eric van Damme, Jacob Goeree, Thomas Kittsteiner, Marta Kolodziejczyk, seminar participants at Tilburg University, Humboldt University Berlin, and National University of Singapore, and audiences at ESEM 2001 in Lausanne, and the FEEM 2002 conference in Milan on auctions and market design. The suggestions of an anonymous referee of this Journal greatly improved the article. The usual disclaimer applies.     

Going, Going, Gone! A Swift Tour of Auction Theory and its Applications

This paper provides a swift tour of auction theory and its applications. Among the questions it considers are: How much do bidders bid in commonly studied single-object auctions? How efficient are these auctions? How much revenue do they generate? Which single-object auction maximizes the seller’s expected revenue? What is the best way to auction incentive contracts? And, how efficient and complex are multi-object auctions?     

Unintended responses to performance management in dutch hospital care: Bringing together the managerial and professional perspectives

As part of a major health care reform starting in 2005, the Netherlands introduced a Diagnosis-Related Group (DRG) system of hospital care reimbursement and performance measurement. The DRG system was applied to all hospital care, meaning that it affected the overwhelming majority of Dutch specialist medical professionals. To better understand the consequences of this new system, and the responses of medical professionals to its implementation, we conducted and analysed an original set of sixty-six semi-structured interviews focused on medical specialists’ perception and utilization of the system. Our findings indicate that these professionals’ behaviours can seldom be ascribed to financial motives alone. Many responses of medical professionals to the new system were attributed to value-based motivations, related to upholding professional ethos and accommodating the dynamics of the professional process. Even responses that might be characterized at first as financially driven could not be entirely understood as perverse effects of the performance management system, as they too usually had an ancillary aim of safeguarding the professional tenets of the medical establishment.     

Evaluation of the long-term cost-effectiveness of liraglutide therapy for patients with type 2 diabetes in France

Objectives:

The present study aimed to compare the projected long-term clinical and cost implications associated with liraglutide, sitagliptin and glimepiride in patients with type 2 diabetes mellitus failing to achieve glycemic control on metformin monotherapy in France.

Methods:

Clinical input data for the modeling analysis were taken from two randomized, controlled trials (LIRA-DPP4 and LEAD-2). Long-term (patient lifetime) projections of clinical outcomes and direct costs (2013 Euros; €) were made using a validated computer simulation model of type 2 diabetes. Costs were taken from published France-specific sources. Future costs and clinical benefits were discounted at 3% annually. Sensitivity analyses were performed.

Results:

Liraglutide was associated with an increase in quality-adjusted life expectancy of 0.25 quality-adjusted life years (QALYs) and an increase in mean direct healthcare costs of €2558 per patient compared with sitagliptin. In the comparison with glimepiride, liraglutide was associated with an increase in quality-adjusted life expectancy of 0.23 QALYs and an increase in direct costs of €4695. Based on these estimates, liraglutide was associated with an incremental cost-effectiveness ratio (ICER) of €10,275 per QALY gained vs sitagliptin and €20,709 per QALY gained vs glimepiride in France.

Conclusion:

Calculated ICERs for both comparisons fell below the commonly quoted willingness-to-pay threshold of €30,000 per QALY gained. Therefore, liraglutide is likely to be cost-effective vs sitagliptin and glimepiride from a healthcare payer perspective in France.     

The determinants of excessive indebtedness of the rural poor

Conclusion The foregoing analysis helps to explain how the poverty cycle deepens and becomes increasingly intolerable for the rural poor. The authors acknowledge the assistance of Les Pinter and Riad Chehlaoui, graduate students, Rice University and the University of Houston, respectively, for some statistical work.