Moonlighting Entrepreneurs

When ability complements effort, we would expect effort to increase with variables that proxy for ability. For example, we show that the hours worked by entrepreneurs should increase in experience, a proxy for ability. Yet, even if education is positively correlated with entrepreneurial ability, it is shown that the relationship between education and hours worked is ambiguous. This is because education allows small business owners to work outside the venture (moonlight) at higher wages. These predictions are supported by existing empirical work.entrepreneurship, hours worked, moonlighting, opportunity cost, wages

Hard Debt, Soft CEO`s and Union Rents

Sometimes shareholders are better off delegating to a CEO with different objectives than their own. A top manager motivated to share surpluses with workers can encourage union members to adopt efficient production methods. Bond covenants may constrain managers from acquiescing to union wage demands. Nevertheless, we argue that unions can win higher wages by altering the non-shirking constraint. Resistance to monitoring leads to deadweight losses that a "soft" CEO can prevent. In this context, managerial retrenchment and incentive contracts with limited upsides are advocated.Efficiency wages, Unions, Bonds, Takeovers, CEO compensation.

Investment after tragedy

This paper considers a community where contracting institutions are weak. If social sanctions against opportunism rise in times of stress, then some good projects may be born out of misfortune.and tragedy

Business Stealing And Bankruptcy

Mankiw and Whinston (1986) demonstrated that increased competition does not necessarily raise welfare when firms incur entry costs. Bankruptcy courts could have a role in discouraging overinvestment by their enforcement of financial contracts.  The courts can move a homogenous goods industry closer to the social optimum by lowering the debt capacity and thereby increasing the taxable income of potential entrants.  Further, it has been shown that exit is often insufficient in homogenous goods industries.  This paper considers how bankruptcy courts can sometimes increase ex post social surplus by shutting down positive net present value firms

Free Exit And Social Inefficiency

Mankiw and Whinston (1986) show that free entry is socially excessive when firms have fixed costs and produce identical goods.  That is because rival firms fail to externalize the business stealing costs they impose on their rivals.  This paper extends that model by assuming that there are two states of demand.  It is proven that weakly too few firms exit voluntarily when demand realizations are low and some of the fixed costs are recoverable.  If there is any voluntary exit, social welfare could strictly rise by forcing more firms to exit the industry

Genetic associations with childhood brain growth, defined in two longitudinal cohorts

Genome-wide association studies (GWASs) are unraveling the genetics of adult brain neuroanatomy as measured by cross-sectional anatomic magnetic resonance imaging (aMRI). However, the genetic mechanisms that shape childhood brain development are, as yet, largely unexplored. In this study we identify common genetic variants associated with childhood brain development as defined by longitudinal aMRI. Genome-wide single nucleotide polymorphism (SNP) data were determined in two cohorts: one enriched for attention-deficit/hyperactivity disorder (ADHD) (LONG cohort: 458 participants; 119 with ADHD) and the other from a population-based cohort (Generation R: 257 participants). The growth of the brain's major regions (cerebral cortex, white matter, basal ganglia, and cerebellum) and one region of interest (the right lateral prefrontal cortex) were defined on all individuals from two aMRIs, and a GWAS and a pathway analysis were performed. In addition, association between polygenic risk for ADHD and brain growth was determined for the LONG cohort. For white matter growth, GWAS meta-analysis identified a genome-wide significant intergenic SNP (rs12386571, P = 9.09 × 10-9 ), near AKR1B10. This gene is part of the aldo-keto reductase superfamily and shows neural expression. No enrichment of neural pathways was detected and polygenic risk for ADHD was not associated with the brain growth phenotypes in the LONG cohort that was enriched for the diagnosis of ADHD. The study illustrates the use of a novel brain growth phenotype defined in vivo for further study

TARP\u27s Dividend Skippers

Most of the banks receiving capital injections from the Troubled Asset Relief Programme (TARP) issued preferred stock to taxpayers. This paper presents the factors that affect publicly traded banks’ ability to pay the scheduled TARP preferred stock dividends. Smaller banks with weaker capital ratios and more problem loans are significantly more likely to suspend payments of their bailout dividends

Lessons for the TARP Warrants from 1983 Chrysler Auction

Vol. 16, No. 2

A Binomial Model of Geithner\u27s Toxic Asset Plan

This paper does not constitute investment advice. The author makes no warranties to anyone using this paper. Such an individual or organization does so at their own risk.