Earnouts: A Study of Financial Contracting in Acquisition Agreements

We empirically examine earnout contracts, which provide for contingent payments in acquisition agreements. Our analysis reveals considerable heterogeneity in the terms of earnout contracts, i.e. the potential size of the earnout, the performance measure on which the contingent payment is based, the period over which performance is measured, the frequency with which performance is measured, and the form of payment for the earnout. Consistent with the costly contracting hypothesis, we find that the terms of earnout contracts are associated with measures of target valuation uncertainty, target growth opportunities, and the degree of post-acquisition integration between target and acquirer. We conclude that earnouts are structured to minimize the costs of adverse selection and moral hazard in acquisition negotiations.

Period Doubling Renormalization for Area-Preserving Maps and Mild Computer Assistance in Contraction Mapping Principle

It has been observed that the famous Feigenbaum-Coullet-Tresser period doubling universality has a counterpart for area-preserving maps of {\fR}^2. A renormalization approach has been used in a "hard" computer-assisted proof of existence of an area-preserving map with orbits of all binary periods in Eckmann et al (1984). As it is the case with all non-trivial universality problems in non-dissipative systems in dimensions more than one, no analytic proof of this period doubling universality exists to date. In this paper we attempt to reduce computer assistance in the argument, and present a mild computer aided proof of the analyticity and compactness of the renormalization operator in a neighborhood of a renormalization fixed point: that is a proof that does not use generalizations of interval arithmetics to functional spaces - but rather relies on interval arithmetics on real numbers only to estimate otherwise explicit expressions. The proof relies on several instance of the Contraction Mapping Principle, which is, again, verified via mild computer assistance

Fatigue delamination behaviour of unidirectional carbon fibre/epoxy laminates reinforced by Z-Fiber® pinnin

-Pin reinforced carbon-fibre epoxy laminates were tested under Mode I and Mode II conditions, both quasi-statically and in fatigue. Test procedures were adapted from existing standard or pre-standard tests. Samples containing 2% and 4% areal densities of carbon-fibre Z-pins (0.28mm diameter) were compared with unpinned laminates. Quasi-static tests under displacement control yielded a dramatic increase of the apparent delamination resistance. Specimens with 2% pin density failed in Mode I at loads 170N, equivalent to an apparent GIC of 2kJ/m2. Fatigue testing under load control showed that the presence of the through- thickness reinforcement slowed down fatigue delamination propagation

A Way to Dynamically Overcome the Cosmological Constant Problem

The Cosmological Constant problem can be solved once we require that the full standard Einstein Hilbert lagrangian, gravity plus matter, is multiplied by a total derivative. We analyze such a picture writing the total derivative as the covariant gradient of a new vector field (b_mu). The dynamics of this b_mu field can play a key role in the explanation of the present cosmological acceleration of the Universe.Comment: 5 page

Enhanced heat transport by turbulent two-phase Rayleigh-B\'enard convection

We report measurements of turbulent heat-transport in samples of ethane (C$_2$H$_6$) heated from below while the applied temperature difference $\Delta T$ straddled the liquid-vapor co-existance curve $T_\phi(P)$. When the sample top temperature $T_t$ decreased below $T_\phi$, droplet condensation occurred and the latent heat of vaporization $H$ provided an additional heat-transport mechanism.The effective conductivity $\lambda_{eff}$ increased linearly with decreasing $T_t$, and reached a maximum value $\lambda_{eff}^*$ that was an order of magnitude larger than the single-phase $\lambda_{eff}$. As $P$ approached the critical pressure, $\lambda_{eff}^*$ increased dramatically even though $H$ vanished. We attribute this phenomenon to an enhanced droplet-nucleation rate as the critical point is approached.Comment: 4 gages, 6 figure

Do Fairness Opinion Valuations Contain Useful Information?

We analyze target firm valuations disclosed in the fairness opinions of negotiated mergers between 1998 and 2005. On average, acquirer advisors exhibit a greater degree of valuation optimism than do target advisors. Top-tier advisors produce more accurate valuations than lower-tier advisors, but valuation accuracy is unrelated to the contingency structure of advisory fees. The stock price reactions to merger announcements and to the public disclosure of fairness opinions are positively related to the difference between target firm valuations contained in the fairness opinion and the merger offer price. We conclude that fairness opinions contain information not previously available to market participants.

Incipient Wigner Localization in Circular Quantum Dots

We study the development of electron-electron correlations in circular quantum dots as the density is decreased. We consider a wide range of both electron number, N<=20, and electron gas parameter, r_s<18, using the diffusion quantum Monte Carlo technique. Features associated with correlation appear to develop very differently in quantum dots than in bulk. The main reason is that translational symmetry is necessarily broken in a dot, leading to density modulation and inhomogeneity. Electron-electron interactions act to enhance this modulation ultimately leading to localization. This process appears to be completely smooth and occurs over a wide range of density. Thus there is a broad regime of ``incipient'' Wigner crystallization in these quantum dots. Our specific conclusions are: (i) The density develops sharp rings while the pair density shows both radial and angular inhomogeneity. (ii) The spin of the ground state is consistent with Hund's (first) rule throughout our entire range of r_s for all 4<N<20. (iii) The addition energy curve first becomes smoother as interactions strengthen -- the mesoscopic fluctuations are damped by correlation -- and then starts to show features characteristic of the classical addition energy. (iv) Localization effects are stronger for a smaller number of electrons. (v) Finally, the gap to certain spin excitations becomes small at the strong interaction (large r_s) side of our regime.Comment: 14 pages, 12 figure

Formal Analysis and Redesign of a Neural Network-Based Aircraft Taxiing System with VerifAI

We demonstrate a unified approach to rigorous design of safety-critical autonomous systems using the VerifAI toolkit for formal analysis of AI-based systems. VerifAI provides an integrated toolchain for tasks spanning the design process, including modeling, falsification, debugging, and ML component retraining. We evaluate all of these applications in an industrial case study on an experimental autonomous aircraft taxiing system developed by Boeing, which uses a neural network to track the centerline of a runway. We define runway scenarios using the Scenic probabilistic programming language, and use them to drive tests in the X-Plane flight simulator. We first perform falsification, automatically finding environment conditions causing the system to violate its specification by deviating significantly from the centerline (or even leaving the runway entirely). Next, we use counterexample analysis to identify distinct failure cases, and confirm their root causes with specialized testing. Finally, we use the results of falsification and debugging to retrain the network, eliminating several failure cases and improving the overall performance of the closed-loop system.Comment: Full version of a CAV 2020 pape

Local field effect as a function of pulse duration

In this note we give semiclassical consideration of the role of pulse duration in observation of local field effects in the regime of optical switching. We show that the main parameter governing local field influence is the ratio of peak Rabi frequency corresponding to medium inversion and Lorentz frequency of the medium. To obtain significant local field effect, this parameter should be near unity that is valid only for long enough pulses. We also discuss the role of relaxation and pulse shape in this processes.Comment: 4 pages, 3 figure