Comparing Different Information Levels

Given a sequence of random variables ${\bf X}=X_1,X_2,\ldots$ suppose the aim is to maximize one's return by picking a `favorable' $X_i$. Obviously, the expected payoff crucially depends on the information at hand. An optimally informed person knows all the values $X_i=x_i$ and thus receives $E (\sup X_i)$. We will compare this return to the expected payoffs of a number of observers having less information, in particular $\sup_i (EX_i)$, the value of the sequence to a person who only knows the first moments of the random variables. In general, there is a stochastic environment (i.e. a class of random variables $\cal C$), and several levels of information. Given some ${\bf X} \in {\cal C}$, an observer possessing information $j$ obtains $r_j({\bf X})$. We are going to study `information sets' of the form $$R_{\cal C}^{j,k} = \{ (x,y) | x = r_j({\bf X}), y=r_k({\bf X}), {\bf X} \in {\cal C} \},$$ characterizing the advantage of $k$ relative to $j$. Since such a set measures the additional payoff by virtue of increased information, its analysis yields a number of interesting results, in particular `prophet-type' inequalities.Comment: 14 pages, 3 figure

Investigations on the respiration of the Neotropical fish, Colossoma macropomum (Serrasalmidae). The influence of weight and temperature on the routine oxygen consumption

The influence of weight and temperature on the routine oxygen consumption of Colossoma macropomum, a Neotropical fish species of the family Serrasalmidae, was investigated using a constant flow respirometer. Plotted on a double logarithmic grid, oxygen consumption increases linearly with weight. Slopes of 0.64 at 25 and 30 °C, and 0.78 at 35 °C were obtained. Because of the significant difference in the slopes, a general value could not be provided. The metabolic rate of a 100 g fish increases from 103.7 to 191.5 and 289.7 mg O2/kg/h at 20, 25, and 30 °C, respectively. At 35 °C, the oxygen consumption rate decreased to 212.4 mg O2/kg/h. The metabolic rate is comparable to those of other tropical fish species. Obviously, Colossoma macropomum is well adapted to the constant temperature conditions of its Neotropical habitats

Randomization does not help much, comparability does

Following Fisher, it is widely believed that randomization "relieves the experimenter from the anxiety of considering innumerable causes by which the data may be disturbed." In particular, it is said to control for known and unknown nuisance factors that may considerably challenge the validity of a result. Looking for quantitative advice, we study a number of straightforward, mathematically simple models. However, they all demonstrate that the optimism with respect to randomization is wishful thinking rather than based on fact. In small to medium-sized samples, random allocation of units to treatments typically yields a considerable imbalance between the groups, i.e., confounding due to randomization is the rule rather than the exception. In the second part of this contribution, we extend the reasoning to a number of traditional arguments for and against randomization. This discussion is rather non-technical, and at times even "foundational" (Frequentist vs. Bayesian). However, its result turns out to be quite similar. While randomization's contribution remains questionable, comparability contributes much to a compelling conclusion. Summing up, classical experimentation based on sound background theory and the systematic construction of exchangeable groups seems to be advisable

Welfare effects of intellectual property in a north-south model of endogenous growth with comparative advantage

This paper develops a model for analyzing the costs and benefits of intellectual property enforcement in LDCs. The North is more productive than the South and is the only source of innovator. There are two types of goods, and each bloc has a comparative advantage in producing a specific type of good. If comparative advantage is strong enough, even under piracy there are goods that the South will not produce. Piracy will then lead to a reallocation of innovative activity in favor of these goods. That may harm consumers (including consumers in the South) to the extent that these goods have smaller dynamic learning externalities than the other goods, and that their share in consumption is small. Thus, whether or not piracy is in the interest of the South depends on how important are the goods for which it has a comparative advantage to its consumers, and what the growth potential of these goods is. While, all else equal, the North tends to lose more (or gain less) from piracy than the South, because monopoly profits eventually accrue to the North, the South may lose more than the North if there is a strong enough home bias in favor of the goods for which it has a comparative advantage

Assessing the political viability of labor market reform : the case of employment protection

Labor market