This paper surveys capital structure theories based on agency costs, asymmetric information, product/input market interactions, and corporate control considerations (but excluding tax-based theories). For each type of model, a brief overview of the papers surveyed and their relation to each other is provided. The central papers are described in some detail, and their results are summarized and followed by a discussion of related extensions. Each section concludes with a summary of the main implications of the models surveyed in the section. Finally, these results are collected and compared to the available evidence. Suggestions for future research are provided.

https://onlinelibrary.wiley.com/doi/pdf/10.1111/j.1540-6261.1991.tb03753.x

The Theory of Capital Structure

/pdf/the-theory-of-industrial-organization-19bejph0ej.pdf

The Theory of Industrial Organization

Peter Berger (1929) is an American sociologist best known for his collaboration with Thomas Luckman in writing The Social Construction of Reality: A Treatise in the Sociology of Knowledge. That book argues that human reality, and knowledge of it, is a social construct, emerging from the individual or group’s interaction with larger social structures (institutions). Social structures, once widely adopted, lose their history as social constructions (objectivation), and come over time, by the people who live within them, to be deemed natural realities independent of human construction (reification). Berger predicted, in his later book, The Sacred Canopy, near-term all-encompassing secularization of religion, which prediction has proved false, especially in the third world (as Berger himself has acknowledged in his later work, Desecularization).

神圣的帷幕 : 宗教社会学理论之要素 = The sacred canopy elements of a sociological theory of religion

Acts of Faith: Explaining the Human Side of Religion. By Rodney Stark and Roger Finke. Berkeley: University of California Press, 2000. 343 pp. $48.00 (cloth); $18.95 (paper). At a recent American Academy of Religion meeting, after a brilliant paper was presented on God and religious experience, the speaker was asked this question by an academic: "But how can you say these things in our postmodem, anti-enlightenment, pluralistic age?" Acts of Faith secures the thesis that not just talk about, but devout belief in, God is rational, widespread, and shows no sign of abating. For a vast number of well-educated, articulate human beings talk of God is not very difficult at all. Acts of Faith is an important treatment of the sociology of religious belief and should be considered required reading by anyone interested in the social standing and assessment of religion. It overturns the conventions of a great deal of earlier sociological inquiry into religion and stands as a model of clarity and rigor. Rodney Stark and Roger Finke begin by documenting the social and intellectual history of atheism, noting how history, sociology, and psychoanalysis have been employed to exhibit the irrationality of religious belief. They underscore how many of these projects have done little more than presup- pose the credulous nature of religion. There is something darkly humorous about the many techniques employed by "intellectuals" and social scientists to explain why religion persists and even grows amidst "modernity." Stark and Finke's analysis is devastating. From the outset through to the last chapter the writing is crisp and at times quite amusing. Here is a passage from the introduction, lamenting the fact that many sociologists focus their work on fringe religious groups: A coven of nine witches in Lund, Sweden, is far more apt to be the object of a case study than is, say, the Episcopal Church, with more than two million members. Some of this merely reflects that it is rather easier to get one's work published if the details are sufficiently lurid or if the group is previously undocumented. A recitation of Episcopalian theology and excerpts from the Book of Common Prayer will not arouse nearly the interest (prurient or otherwise) than can be generated by tales of blondes upon the altar and sexual contacts with animals (p. 19). Stark and Finke have written a text that abounds in technical case studies, while at the same time giving us a book that is a pleasure to read. The introduction and first three chapters alone are a tour de force. They expose the blatant inadequacy of sociological work that reads religious belief as pathology or flagrant irrationality. They challenge the thesis of impending, virtually inevitable secularization, for instance, in part by refuting the claim that in the distant past almost everyone was religious. …

Acts of Faith: Explaining the Human Side of Religion

Argumentation in artificial intelligence

It is well known that adverse selection causes distortions in contracts in markets with asymmetric information. Taxing inefficient contracts and subsidizing the efficient ones can improve market outcomes (Bruce C. Greenwald and Joseph E. Stiglitz, 1986), although regulators rarely seem to implement tax and subsidy schemes with adverse-selection motives in mind. Contracts are often complex and “incomplete,” and it is the “inefficient” elements of the contract that are difficult to verify and hence tax or subsidize. This is precisely the reason that in health insurance markets, rather than subsidizing contracts, regulators and payers contend with adverse selection by taxing and subsidizing the price paid to insuring health plans on the basis of observable characteristics of the persons joining the plan — a practice known as “risk adjustment”…

Optimal Risk Adjustment in Markets with Adverse Selection: An Application to Managed Care

This paper models the wage-contract negotiation procedure between a union and a firm as a sequential bargaining process in which the union must decide, in each period, whether or not to strike for the duration of that period. We show that there exist subgame-perfect equilibria in which the union engages in several periods of strikes prior to reaching a final agreement, although both parties are completely rational and fully informed. This has implications for other inefficient phenomena, such as tariff wars, debt negotiations, and wars in general. We characterize the set of equilibria, show that strikes can occur in real time, and discuss extensions of the model, such as lockouts and the possibility of multiple recontracting opportunities. Copyright 1991 by American Economic Association.

Striking for a Bargain Between Two Completely Informed Agents

A speaker wishes to persuade a listener to accept a certain request. The conditions under which the request is justified, from the listener's point of view, depend on the values of two aspects. The values of the aspects are known only to the speaker and the listener can check the value of at most one. A mechanism specifies a set of messages that the speaker can send and a rule that determines the listener's response, namely, which aspect he checks and whether he accepts or rejects the speaker's request. We study mechanisms that maximize the probability that the listener accepts the request when it is justified and rejects the request when it is unjustified, given that the speaker maximizes the probability that his request is accepted. We show that a simple optimal mechanism exists and can be found by solving a linear programming problem in which the set of constraints is derived from what we call the L-principle.

On Optimal Rules of Persuasion

https://www.nber.org/system/files/working_papers/w6825/w6825.pdf

Measuring adverse selection in managed health care.

This paper models the wage-contract negotiation procedure between a union and a firm as a sequential bargaining process in which the unionalso decides, in each period, whether or not to strike for the duration of that period. We show that there exist subgame-perfect equilibria in which the union engages in several periods of strikes prior to reaching a final agreement, although both parties are completely rational and fully informed. This has implications for other inefficient phenomena such as tariff wars, debt negotiations, and wars in general. We characterize the set of equilibria, show that strikes can occur in real time, and discuss extensions of the model such as lockouts and the possibility of multiple recontracting opportunities.

/pdf/striking-for-a-bargain-between-two-completely-informed-3qwynmznzu.pdf

Jacob Glazer

Papers

Optimal Risk Adjustment in Markets with Adverse Selection: An Application to Managed Care

Striking for a Bargain Between Two Completely Informed Agents

On Optimal Rules of Persuasion

Measuring adverse selection in managed health care.

Striking for a Bargain Between Two Completely Informed Agents