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We explore how optimal information choices change the predictions of strategic models. When a large number of agents play a game with strategic complementarity, information choices exhibit complementarity as well: if an agent wants to do what others do, they want to know what others know. This makes heterogeneous beliefs difficult to sustain and may generate multiple equilibria. In models with substitutability, agents prefer to differentiate their information choices. We use these theoretical results to examine the role of information choice in recent price-setting models and to propose modelling techniques that ensure equilibrium uniqueness.

In all markets, firms go through a process of creative destruction: entry, random growth, and exit. In many of these markets there are also regulations that restrict entry, possibly distorting this process. We study the public interest rationale for entry taxes in a general equilibrium model with free entry and exit of firms in which firm dynamics are driven by reputation concerns. In our model firms can produce high-quality output by making a costly but efficient initial unobservable investment. If buyers never learn about this investment, an extreme ‘‘lemons problem’’ develops, no firm invests, and the market shuts down. Learning introduces reputation incentives such that a fraction of entrants do invest. We show that if the market operates with spot prices, entry taxes always enhance the role of reputation to induce investment, improving welfare despite the impact of these taxes on equilibrium prices and total production.

Global games of regime change-coordination games of incomplete information in which a status quo is abandoned once a sufficiently large fraction of agents attack it-have been used to study crises phenomena such as currency attacks, bank runs, debt crises, and political change. We extend the static benchmark examined in the literature by allowing agents to take actions in many periods and to learn about the underlying fundamentals over time. We first provide a simple recursive algorithm for the characterization of monotone equilibria. We then show how the interaction of the knowledge that the regime survived past attacks with the arrival of information over time, or with changes in fundamentals, leads to interesting equilibrium properties. First, multiplicity may obtain under the same conditions on exogenous information that guarantee uniqueness in the static benchmark. Second, fundamentals may predict the eventual fate of the regime but not the timing or the number of attacks. Finally, equilibrium dynamics can alternate between phases of tranquility-where no attack is possible-and phases of distress-where a large attack can occur-even without changes in fundamentals.

Cancer cells that are resistant to Bax/Bak-dependent intrinsic apoptosis can be eliminated by proteasome inhibition. Here, we show that proteasome inhibition induces the formation of high molecular weight platforms in the cytosol that serve to activate caspase-8. The activation complexes contain Fas-associated death domain (FADD) and receptor-interacting serine/threonine-protein kinase 1 (RIPK1). Furthermore, the complexes contain TRAIL-receptor 2 (TRAIL-R2) but not TRAIL-receptor 1 (TRAIL-R1). While RIPK1 inhibition or depletion did not affect proteasome inhibitor-induced cell death, TRAIL-R2 was found essential for efficient caspase-8 activation, since the loss of TRAIL-R2 expression abrogated caspase processing, significantly reduced cell death, and promoted cell re-growth after drug washout. Overall, our study provides novel insight into the mechanisms by which proteasome inhibition eliminates otherwise apoptosis-resistant cells, and highlights the crucial role of a ligand-independent but TRAIL-R2-dependent activation mechanism for caspase-8 in this scenario.

Apoptosis resistance contributes to treatment failure in colorectal cancer (CRC). New treatments that reinstate apoptosis competency have potential to improve patient outcome but require predictive biomarkers to target them to responsive patient populations. Inhibitor of apoptosis proteins (IAPs) suppress apoptosis, contributing to drug resistance; IAP antagonists such as TL32711 have therefore been developed. We developed a systems biology approach for predicting response of CRC cells to chemotherapy and TL32711 combinations in vitro and in vivo. CRC cells responded poorly to TL32711 monotherapy in vitro; however, co-treatment with 5-fluorouracil (5-FU) and oxaliplatin enhanced TL32711-induced apoptosis. Notably, cells from genetically identical populations responded highly heterogeneously, with caspases being activated both upstream and downstream of mitochondrial outer membrane permeabilisation (MOMP). These data, combined with quantities of key apoptosis regulators were sufficient to replicate in vitro cell death profiles by mathematical modelling. In vivo, apoptosis protein expression was significantly altered, and mathematical modelling for these conditions predicted higher apoptosis resistance that could nevertheless be overcome by combination of chemotherapy and TL32711. Subsequent experimental observations agreed with these predictions, and the observed effects on tumour growth inhibition correlated robustly with apoptosis competency. We therefore obtained insights into intracellular signal transduction kinetics and their population-based heterogeneities for chemotherapy/TL32711 combinations and provide proof-of-concept that mathematical modelling of apoptosis competency can simulate and predict responsiveness in vivo. Being able to predict response to IAP antagonist-based treatments on the background of cell-to-cell heterogeneities in the future might assist in improving treatment stratification approaches for these emerging apoptosis-targeting agents.

We develop a model of currency crises, in which traders are heterogeneously informed, and interest rates are endogenously determined in a noisy rational expectations equilibrium. In our model, multiple equilibria result from distinct roles an interest rate plays in determining domestic asset market allocations and the devaluation outcome. Except for special cases, this finding is not affected by the introduction of noisy private signals. We conclude that the global games results on equilibrium uniqueness do not apply to market-based models of currency crises.

Theories based on information costs or frictions have become increasing popular in macroeconomics and macro-finance. The literature has used various types of information choices, such as rational inattention, inattentiveness, information markets and costly precision. Using a unified framework, we compare these different information choice technologies and explain why some generate increasing returns and others, particularly those where agents choose how much public information to observe, generate multiple equilibria. The results can help applied theorists to choose the appropriate information choice technology for their application and to understand the consequences of that modeling choice.

We characterize equilibria with endogenous debt constraints for a general equilibrium economy with limited commitment in which the only consequence of default is losing the ability to borrow in future periods. First, we show that equilibrium debt limits must satisfy a simple condition that allows agents to exactly roll over existing debt period by period. Second, we provide an equivalence result, whereby the resulting set of equilibrium allocations with self-enforcing private debt is equivalent to the allocations that are sustained with unbacked public debt or rational bubbles. In contrast to the classic result by Bulow and Rogoff (1989a), positive levels of debt are sustainable in our environment because the interest rate is sufficiently low to provide repayment incentives.