Related Literature. We apply the theory of Bayesian games originally developed by Xxxxxxxx (1967, 1968a,b) to model the interactions between the power plant and the distributor. Bayesian games have been applied to the electricity markets to model the suppliers’ bidding processes in which each power plant’s marginal cost is private information. Such a game has been analyzed in various market conditions by Ferrero et al. (1998), Xxxxxxxxxxxx et al. (2002), Xx and Xxxxxxxxxxxx (2005), and Xxxxxxx (2005), among others. Horta¸csu and Puller (2008) analyze bidding processes in which contract positions are private information. Unlike previous works, in this paper information asymmetry comes from the fact that the plant’s status cannot be directly observed by the distributor, and the unit-contingent power purchase agreement introduces incentive conflicts into the system. Several economics papers on contract theory are related to our work. For example, Laffont and Martimort (2002, Section 3.6) discuss an adverse selection problem with audits and costly state verification. The costly audit allows the principal to detect an untruthful agent’s report and impose penalties. The Revelation Principle still applies, and under the truth-revealing mechanisms, punishments are never used, but the existence of punishments reduces agent’s incentive to lie and, hence, reduces informational rents. Xxxxxxxxxx and Png (1989) and Xxxxxxxxx and Xxxxx (1985) apply the adverse selection problems with costly state verification to insurance and taxation. In contrast to these papers, our analysis is focused on a particular contract form commonly seen in practice. Because of the restriction on the contract set, instead of invoking the mechanism design approach (as in Myerson 1981, 1979, Guesnerie and Laffont 1984), we find the equilibrium of the Bayesian game directly. of these games range from unobservable inspection and simultaneous moves (Diamond 1982) to observable inspection and sequential moves (Avenhaus and Xxxxx 2005). Our problem differs from the inspection games in two aspects. First, the players’ payoffs in our problem depend on both a publicly observable stochastic process and an inspectee’s private information process. The inspectee’s incentive to violate depends on both processes, while the inspector’s incentive to inspect depends on the public signal and the inspectee’s report. Second, in our setting, before the game begins, the inspector offers a contract to the inspectee that affects players’ ...
Related Literature. There is a wide choice of related literature concerning the aggregation of SLAs. Approaches of close relationship to our work can be roughly categorized in three areas whose boundaries blur to some extent. Models which aggregate the SLOs of single SLIs in a mathematical way are introduced in (Xxxxx and Xxxxxxxx 2007; Xxxxxx et al. 2004; Xxxxx et al. 2008). Models which cover the PROSA characteris- tic of being a document, that is, they provide a framework for building a single document out of a set of SLA documents (SLAs of the single services invoked by one BP) are discussed in (Xxxxxx and Xxxxxxxx 2008; Xxxxxxxxx et al. 2007; Xxxxxxx 2000). Finally, (Xxxx et al. 2002; Xxxx et al. 2008) elaborate models which validate the SLOs on BP level by means of simulations. The related work delivers some valuable insights into two main aspects of the in hand research domain. On the one hand approaches to technically aggregate SLIs and on the other hand ap- proaches which deal with the SLA characteristic of being a document that is aggre- gating the single SLAs to one document. But some highly interesting and impor- tant issues are not covered. Presented models are bottom-up-approaches. Looking at the motivation our approach is customer-oriented. That is a customer who wants to facilitate his business processes by IT-services delivers the objectives concerning the SLOs of the PROSA to the provider(s). Therefore these objectives have to be drilled down to a deep level of technical services – a top-down- approach. Whereas a bottom-up-approach deals with the attributes of technical services and aggregates them bottom-up which is not suitable for our addressed issues. Additionally the mentioned approaches do not cover both aspects custom- er-orientation and provider-methodology. They are all driven by the providers’ perspective. In summary, current approaches deliver first contributions to the do- main of SLA aggregation. But they do not cover the customer as well as the pro- vider perspective in an adequate way. Especially the motivated customer orienta- tion is not represented as much as required.
Related Literature. Sequential P4D deals with potential challengers are similar to the logic developed by Xxxxxxxx [1984], but with deterrence investment substituted with P4D deals and licensing an AG. In fact, the strategy of launching an AG via a P4D deal with a challenger, as discussed in this paper, is similar to earlier studies that focus on licensing as a strategy to maintain market leadership and/or deter entry. For instance, Xxxxxxx [1984] shows the conditions where the incumbent licenses its production technology to a potential entrant in exchange for terminating research into competing or better technology, while Xxxxxxx [1990] and Xxxxxxx [1994] provide models where the incumbent licenses either the weaker competitor or a competitor from outside of the industry, so as to crowd the market and discourage stronger competitors from entering. Yet, despite these similarities, important differences exist between our paper and previous studies on licensing. In our paper the generic with the AG licence is the de facto strongest competitor to the brand as it enters before other generics and grabs the first mover advantage. Additionally, instead of a license being introduced prior to the potential competitor incurring entry costs, in our paper the license is issued and AG launched only if the next potential entrant has incurred an entry cost, (i.e., a litigation cost) and is successful. Several studies have documented the impact branded manufacturers have when they launch their own generic or an authorized generic (AG) via a third party on independent generic entry. Xxxxxx [2003] argues that authorized generics deter independent generic entry in intermediate sized markets (and “probably” in other markets as well) while Reiffen and Xxxx [2007] show that authorized generic entry may deter independent generic entry in small and intermediate sized markets only and raise the long run prices by 1-2%. Xxxxxx et al. [2007] argue that the effect of authorized entry on independent generic entry and ultimately on consumer welfare is likely to be small but still positive. However, Xxxxxx [2015] reports that early authorized entry has no impact on the likelihood of generic entry. As documented in a report by the Federal Trade Commission [FTC, 2011b, pp.17-18], authorized generics can be launched by the branded firm itself (in-house) or via third parties but require expertise in generic marketing. This is because whereas brand name drugs are typically marketed to physicians and consumers e...
Related Literature. Sequential P4D deals with potential challengers share the logic developed by Xxxxxxxx (1984), but with deterrence investment substituted with P4D deals and licensing an authorized generic (AG). Indeed, the strategy of launching an AG via a P4D deal with a challenger is similar to earlier studies that focus on licensing as a strategy to maintain market leadership and/or deter entry. For instance, Xxxxxxx (1984) shows the conditions where the incumbent licenses its production technology to a potential entrant in exchange for terminating research into competing for better technology, while Xxxxxxx (1990) and Xxxxxxx (1994) provide models where the incumbent licenses either the weaker competitor or a competitor from outside of the industry, so as to crowd the market and discourage stronger competitors from entering. By contrast, in our paper, the generic with the AG license is the de facto strongest competitor to the brand as it enters before other generics and grabs the first mover advantage. Additionally, instead of a license being introduced prior to the potential competitor incurring entry costs, in our paper the license is issued and AG launched only if the next potential entrant has incurred an entry cost (i.e., litigation cost), and is successful. A significant economic and legal literature builds around theory of harm and focuses on the legality of pay-for-delay deals (Xxxxxxx, 2003a, Xxxxxx and Xxxxxxx, 2005, Xxxxxxx and Xxxxxxx, 2008, Xxxxx, 2012). Under Xxxxxxx’x antitrust welfare criteria – that a settlement should leave the consumers at least as well off as the ongoing patent litigation – a payment that exceeds the expected litigation costs of the licensor is sufficient to establish that consumers lose from the settlement (Xxxxxxx, 2003b, Elhauge and Xxxxxxx, 2012). In line with this reasoning, several authors have argued that pay-for-delay settlements should carry a presumption of per se anticompetitive behavior (see for instance, Xxxxxxxxx et al., 2003, Bulow, 2004, Xxxxxxx and Xxxxxxx, 2004, Xxxxxxxx, 2009). Others have pointed out that while the theory of harm is useful, it has limitations and cannot be applied directly to the more complex agreements between the parties, or that P4D deals can in fact be pro-competitive in some situations, and hence such deals should not be per se illegal (Xxxxx, 2002, Xxxxxx and Xxxxxxx, 2004, Xxxxxx et al., 2010, Xxxxxxxx, 2013). For instance, Xxxxxxx and Xxxxxxx (2015) critique Xxxxxxx and Xxxxxxx (2012) and...
Related Literature. Research on debtor-in-possession financing began receiving popularity in the mid-1990s, likely due to the emergence of the modern U.S. bankruptcy system in 1978 with the adoption of the Bankruptcy Reform Act. According to Xxxxxx, the 1980s saw an explosion of activity in the junk bond markets, as well as the appearance of leveraged buyouts by then-niche private equity players like KKR and TPG (46). The U.S. as a whole was giving more freedom to the debtor in cases of distress, so corporations felt more comfortable issuing junk bonds to raise funds if they knew there was a strong market demand for high yield, and that in a distressed scenario, they did not have an obligation to pay down unsecured debt claims at-cost if the liquidation value of their firm would not cover the debt (Xxxxxx 44). A short series of financial crises in the 1980s and 1990s, notably, Black Monday in 1989, the early 1990s recession in the US after the Iraqi invasion of Kuwait, and importantly, the dot-com bubble burst in 2000, may have prompted research into the implications of the new Bankruptcy Law (44). Initial financial economic research related to the effect of financial distress, and subsequent DIP financings, on equity- market reactions with time-series analysis. Xxxxxx and Xxxxx (2001), published in the Journal of Business Finance & Accounting, was one of the first papers to examine the effect of DIP financing on the outcomes of financial distress. This paper sought to investigate the recent explosion in financial distress and tested the interaction between the reception of the DIP and a host of dependent variables, including market reaction and emergence from Chapter 11. The paper found that equity returns in the two days after the announcement of the DIP were positive and statistically significant, following a worsening market reaction 4 and 5 days before the announcement of the DIP. Additionally, this paper found that the success rate for firms that receive DIP financing is 87.50%, compared to a 71.25% rate for firms that do not. With regards to bankruptcy duration, a variable I intend to regress, Xxxxxx and Xxxxx found that the reception of the DIP reduced the length of time in bankruptcy by 98 days, significant at the 10% level. These results were adjusted to incorporate the size of the DIP, but while the size of the DIP changes inter-group time in bankruptcy, controlling for size effect does not change the results between DIP and non-DIP financed firms. However, the aut...
Related Literature. In this section I will first take a quick glance at the video game industry and then go through scholarly works that have been done on the subjects of dynamic incentives and consumer investment. By reviewing the literature, I hope to spot the gap in the current literature and describe the contribution of my work.
Related Literature. Multiple streams of research inform my investigation into gamification. Prior work on loyalty programs, gambling and goals each discuss how gamification may influence consumer behavior. In what follows, I will identify key findings from these literatures that help explain how consumers should respond to gamification programs that combine dynamic incentive schemes with outcome uncertainty.
Related Literature. Our paper is related to a number of literatures. There is an extensive literature on the costs of unproductive activities such as rent seeking, con ict, and in uence activities.13 Our focus, however, is not on the direct e ciency costs generated by these unproductive activities, but on the indirect e ects that they have in preventing ex-ante cooperation. More speci cally, we show that the diversity in opportunities or endowments between the parties who interact repeatedly can increase the magnitude of the endogenous externalities generated by an agreement.
Related Literature. This paper draws from and contributes to three areas of prior and ongoing research. One area is the literature that explores potential uses of electronic ledger technology to improve economic outcomes. Xxxxxxxx (2020) (34) discusses myriad potential use-cases where outcomes can be improved when financial objects are appended to programmable participant accessible ledgers. This paper adds the example of the repo market to list of applications. Another area is the literature on the shadow banking sector where, in the aftermath of the financial crisis there has been an effort to map the system, of which the repo market is an important part. Economists at the Federal Reserve and the Department of Treasury Office of Financial Research have published a large number of studies that draw on new administrative data collected from financial firms as a result of the Xxxx-Xxxxx legislation.5 Finally, this paper contributes to the ongoing discussion of reforms to increase the capacity of banks to intermediate the repo market. In response to the disruptions that occured in the repo market in September 2019 and in the cash treasuries market in October 2014 and March 2020, there have been proposed regulatory reforms to reduce the likelihood and severity of future disruptions. Xxxxxx (2018) (13) and (2020) (14) and the Group of Thirty (2020) (14) have notably contributed to this reassessment exercise. We contribute to this literature by proposing a very different approach to improving repo market performance and resiliency.
Related Literature.
3.2.1 Literacy and Numeracy in the UK Literacy broadly captures the “ability to speak, listen and respond, read and comprehend, and write to communicate” while numeracy generally covers the ability to “understand and use mathematical information, calculate and manipulate mathematical information, and entry 3 (Xxxxxxx, 2012). Historically, numeracy has been overlooked in adult education compared to literacy ability which has received more attention (Tout, 2020). Solely assessing the numeracy skills of adults can be difficult for a variety of reasons as test takers may experience difficulty in distinguishing between context and formal knowledge. For example, some adults who are able to perform basic mathematics in everyday life struggle with simple questions when this knowledge is formally tested (Xxxxxxxxxxx et al., 2010). Xxxxx et al. (2005) identify five difficulties in numeracy research which are summarised in Xxxxxxxxxxx et al. (2010). The first is that independently assessing numeracy skills is difficult because these tests rely on the respondent having adequate literacy skills. Thus, a respondent with limited literacy skills will be unable to properly demonstrate their numeracy ability. Context is another important factor to consider as it is possible that some individuals may not recognise numeracy in activities that occur in environments other than the classroom. The third factor is related to the fact that skill levels may fluctuate, declining due to lack of usage or improving with training. In addition, some individuals perform poorly on formal assessments due to anxiety, thus their results may not accurately depict their skill levels. Fifth, it is quite difficult to develop numeracy assessments that comprehensively encapsulate real world skills. Research into the skills levels of the adult population in the UK was initiated by the findings that close to 20 percent of adults in England were not functionally literate i.e., entry level in numeracy and below level 1 in literacy, which led to the establishment of the working group that produced the Xxxxx report (DfEE, 1999). The report identified several factors responsible for the skills deficit in England and cited the poor schooling system as a major factor leading to children completing the schooling system without an adequate grasp of basic skills. The report set out ambitious national targets such as halving the number of illiterate adults of working age by the year 2010. It also placed empha...
