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Do compensation consultants drive up CEO pay for the benefit of managers, or do they design pay packages to benefit firm owners? Using a large sample of UK firms from the FTSE All‐Share Index over the 2003–2011 period, we show a positive correlation between the presence of compensation consultants and CEO pay. Importantly, isolating this effect is somewhat dependent on the endogenous selection of consultants and the statistical modelling strategy deployed. We find evidence that compensation consultants improve CEO compensation design when their expertise is of greater importance (e.g. during the post‐financial crisis period, or for firms that have particularly weak compensation policies). In addition, our findings show that compensation consultants increase CEO pay–performance sensitivity. The balance of evidence supports optimal contracting theory more than managerial power theory, but the authors caution the limits to this verification. We are careful to note that the more compelling evidence for the positive effect of pay consultants on CEOs is based on advanced methods (such as propensity score matching and difference‐in‐differences), and that more standard approaches (such as OLS and fixed effects) are unlikely to reveal the same level of causality of consultants on CEO pay.

PURPOSE Parameter identifiability and confidence intervals were determined using a profile likelihood (PL) analysis method in a quantification model of the cerebral metabolic rate of oxygen consumption (CMRO2 ) with direct 17 O MRI. METHODS Three-dimensional dynamic 17 O MRI datasets of the human brain were acquired after inhalation of 17 O2 gas with the help of a rebreathing system, and CMRO2 was quantified with a pharmacokinetic model. To analyze the influence of the different model parameters on the identifiability of CMRO2 , PLs were calculated for different settings of the model parameters. In particular, the 17 O enrichment fraction of the inhaled 17 O2 gas, α, was investigated assuming a constant and a linearly varying model. Identifiability was analyzed for white and gray matter, and the dependency on different priors was studied. RESULTS Prior knowledge about only one α-related parameter was sufficient to resolve the CMRO2 nonidentifiability, and CMRO2 rates (0.72-0.99 µmol/gtissue /min in white matter, 1.02-1.78 µmol/gtissue /min in gray matter) are in a good agreement with the results of 15 O positron emission tomography studies. Nonconstant α values significantly improved model fitting. CONCLUSION The profile likelihood analysis shows that CMRO2 can be measured reliably in 17 O gas MRI experiment if the 17 O enrichment fraction is used as prior information for the model calculations. Magn Reson Med 78:1157-1167, 2017. © 2016 International Society for Magnetic Resonance in Medicine.

The objective of this paper is to study how contagion works in financial markets by identifying the mechanisms which drive the spill-over of shocks from one market to other markets. To address this question we use open-ended property funds (OPFs) as they offer a unique institutional setting which allows separating between liquidity and information spill-over. We find that that liquidity risk captures the observed discounts very well when the danger of potential future impairments is low. Once the impending NAV impairments become very likely, also this component matters and attributes for a fraction of the total discount.

We introduce a framework for strategic asset allocation with alternative investments. Our framework uses a quantifiable risk preference parameter, λ, instead of a utility function. We account for higher moments of the return distributions and approximate best-fit distributions. Thus, we replace the empirical return distributions with two normal distributions. We then use these in the strategic asset allocation. Our framework yields better results than Markowitz's framework. Furthermore, our framework better manages regime switches that occur during crises. To test the robustness of our results, we use a battery of robustness checks and find stable results.