Group-Wise Herding Behavior in Financial Markets: An Agent-Based Modeling Approach

In this paper, we shed light on the dynamic characteristics of rational group behaviors and the relationship between monetary policy and economic units in the financial market by using an agent-based model (ABM), the Hurst exponent, and the Shannon entropy. First, an agent-based model is used to analyze the characteristics of the group behaviors at different levels of irrationality. Second, the Hurst exponent is applied to analyze the characteristics of the trend-following irrationality group. Third, the Shannon entropy is used to analyze the randomness and unpredictability of group behavior. We show that in a system that focuses on macro-monetary policy, steep fluctuations occur, meaning that the medium-level irrationality group has the highest Hurst exponent and Shannon entropy among all of the groups. However, in a system that focuses on micro-monetary policy, all group behaviors follow a stable trend, and the medium irrationality group thus remains stable, too. Likewise, in a system that focuses on both micro- and macro-monetary policies, all groups tend to be stable. Consequently, we find that group behavior varies across economic units at each irrationality level for micro- and macro-monetary policy in the financial market. Together, these findings offer key insights into monetary policy.     

Making robust policy decisions using global biodiversity indicators

In order to influence global policy effectively, conservation scientists need to be able to provide robust predictions of the impact of alternative policies on biodiversity and measure progress towards goals using reliable indicators. We present a framework for using biodiversity indicators predictively to inform policy choices at a global level. The approach is illustrated with two case studies in which we project forwards the impacts of feasible policies on trends in biodiversity and in relevant indicators. The policies are based on targets agreed at the Convention on Biological Diversity (CBD) meeting in Nagoya in October 2010. The first case study compares protected area policies for African mammals, assessed using the Red List Index; the second example uses the Living Planet Index to assess the impact of a complete halt, versus a reduction, in bottom trawling. In the protected areas example, we find that the indicator can aid in decision-making because it is able to differentiate between the impacts of the different policies. In the bottom trawling example, the indicator exhibits some counter-intuitive behaviour, due to over-representation of some taxonomic and functional groups in the indicator, and contrasting impacts of the policies on different groups caused by trophic interactions. Our results support the need for further research on how to use predictive models and indicators to credibly track trends and inform policy. To be useful and relevant, scientists must make testable predictions about the impact of global policy on biodiversity to ensure that targets such as those set at Nagoya catalyse effective and measurable change.     

Monetary Valuation of Emissions in Implementing Environmental Policy

At various levels of environmental policy making there is a demand to translate polluting emissions into monetary units. In the so-called reduction cost approach, based upon policy targets, polluting emissions are expressed in monetary terms by determination of the marginal unit reduction cost at the emission target level. This approach provides shadow prices for emissions by which it can be established whether a certain measure or technology belongs to the most efficient set of measures by which the policy targets can be reached. This article argues that, if clear (generic) government targets such as national emission reduction targets exist for an emission, shadow prices derived by this method are to be preferred to shadow prices derived by other methods for decisions at the project (implementation) level. By application of the reduction cost approach, implementation decisions can be made that are both cost-effective and consistent with government policy.     

The effect of evolution on host-parasitoid systems

It is well known that a simple first-order difference equation can exhibit complex population dynamics, such as sustained oscillations and chaos. An interesting problem is whether such oscillatory dynamics are expected to occur in real populations. This paper assumes that the resident system is composed of 1-host and 1-parasitoid and that only the host is allowed to evolve, but not the parasitoid. Based on the invasibility of a host to host-parasitoid systems, we investigate the dynamics of the host-parasitoid system favored by natural selection. We consider two cases. In the first case, the host's evolution involving both the intrinsic growth rate and the sensitivity to density is considered. In the second case, the host's evolution involving both the intrinsic growth rate and the vulnerability to the parasitoid is considered. In both cases, we see that the dynamics with a stable equilibrium will not be favored by natural selection without the trade-off between the host's traits which are allowed to evolve. The host-parasitoid system with a stable equilibrium will be eventually invaded by a host type that develops an unstable equilibrium with the parasitoid. If there is a trade-off between the host's traits which are allowed to evolve, a host-parasitoid system with a stable equilibrium can be favored by natural selection.     

Effect of a sharp change of the incidence function on the dynamics of a simple disease

We investigate two cases of a sharp change of incidencec functions on the dynamics of a susceptible-infective-susceptible epidemic model. In the first case, low population levels have mass action incidence, while high population levels have proportional incidence, the switch occurring when the total population reaches a certain threshold. Using a modified Dulac theorem, we prove that this system has a single equilibrium which attracts all solutions for which the disease is present and the population remains bounded. In the second case, an increase of the number of infectives leads to a mass action term being added to a standard incidence term. We show that this allows a Hopf bifurcation to occur, with periodic orbits being generated when a locally asymptotically stable equilibrium loses stability.     

Oxytocin is associated with human trustworthiness

Human beings exhibit substantial interpersonal trust-even with strangers. The neuroactive hormone oxytocin facilitates social recognition in animals, and we examine if oxytocin is related to trustworthiness between humans. This paper reports the results of an experiment to test this hypothesis, where trust and trustworthiness are measured using the sequential anonymous "trust game" with monetary payoffs. We find that oxytocin levels are higher in subjects who receive a monetary transfer that reflects an intention of trust relative to an unintentional monetary transfer of the same amount. In addition, higher oxytocin levels are associated with trustworthy behavior (the reciprocation of trust). Absent intentionality, both the oxytocin and behavioral responses are extinguished. We conclude that perceptions of intentions of trust affect levels of circulating oxytocin.     

Valuing ecosystem services to explore scenarios for adaptive spatial planning

As the ecosystem services concept increasingly gains importance, it needs translation into practical applications. Recent efforts of EU member states to map ES are opening new opportunities to include ES in spatial planning and adaptive land management. For this, spatial planners and policy makers need practical tools that integrate a variety of social and biophysical information in an accessible way. We argue that monetary valuation of ES can contribute to this challenge. A methodological framework was developed to explore adaptive management of bioproductive space. The first stage in the methodology is a spatially explicit evaluation of various ecosystem services for different land uses. In a second stage, bio-physical and socio-economic drivers or shocks are introduced that can influence the value society attributes to specific ecosystem services. The third stage of the methodology takes policy priorities into account. In a final stage, the output of the approach is synthesised by ranking the analysis results for different scenarios and policy priority settings. This methodology allows spatial planners to explore and evaluate policy decisions against trade-offs between various land use alternatives, while taking ecosystem services into account. To demonstrate its use, the methodology is applied to a small-scale case study that combines extensive livestock production with the development of natural values. The application to the case demonstrates that the optimal strategy from a societal perspective, can be highly context-dependent. Besides the potential for supporting policy makers to think about the broader implications of land use changes for community wellbeing, the methodology provides useful feedback for adaptive farm and landscape management. We underline both the potential and possible caveats in using this approach for land use evaluation.     

Stability of choice in the honey bee nest-site selection process

We introduce a pair of compartment models for the honey bee nest-site selection process that lend themselves to analytic methods. The first model represents a swarm of bees deciding whether a site is viable, and the second characterizes its ability to select between two viable sites. We find that the one-site assessment process has two equilibrium states: a disinterested equilibrium (DE) in which the bees show no interest in the site and an interested equilibrium (IE) in which bees show interest. In analogy with epidemic models, we define basic and absolute recruitment numbers (R₀ and B₀) as measures of the swarm's sensitivity to dancing by a single bee. If R₀ is less than one then the DE is locally stable, and if B₀ is less than one then it is globally stable. If R₀ is greater than one then the DE is unstable and the IE is stable under realistic conditions. In addition, there exists a critical site quality threshold Q^* above which the site can attract some interest (at equilibrium) and below which it cannot. We also find the existence of a second critical site quality threshold Q^** above which the site can attract a quorum (at equilibrium) and below which it cannot. The two-site discrimination process, in which we examine a swarm's ability to simultaneously consider two sites differing in both site quality and discovery time, has a stable DE if and only if both sites’ individual basic recruitment numbers are less than one. Numerical experiments are performed to study the influences of site quality on quorum time and the outcome of competition between a lower quality site discovered first and a higher quality site discovered second.     

Selected-fit versus induced-fit protein binding: kinetic differences and mutational analysis

The binding of a ligand molecule to a protein is often accompanied by conformational changes of the protein. A central question is whether the ligand induces the conformational change (induced-fit), or rather selects and stabilizes a complementary conformation from a pre-existing equilibrium of ground and excited states of the protein (selected-fit). We consider here the binding kinetics in a simple four-state model of ligand-protein binding. In this model, the protein has two conformations, which can both bind the ligand. The first conformation is the ground state of the protein when the ligand is off, and the second conformation is the ground state when the ligand is bound. The induced-fit mechanism corresponds to ligand binding in the unbound ground state, and the selected-fit mechanism to ligand binding in the excited state. We find a simple, characteristic difference between the on- and off-rates in the two mechanisms if the conformational relaxation into the ground states is fast. In the case of selected-fit binding, the on-rate depends on the conformational equilibrium constant, whereas the off-rate is independent. In the case of induced-fit binding, in contrast, the off-rate depends on the conformational equilibrium, while the on-rate is independent. Whether a protein binds a ligand via selected-fit or induced-fit thus may be revealed by mutations far from the protein's binding pocket, or other "perturbations" that only affect the conformational equilibrium. In the case of selected-fit, such mutations will only change the on-rate, and in the case of induced-fit, only the off-rate.     

Coexistence in the chemostat as a result of metabolic by-products

Classical chemostat models assume that competition is purely exploitative and mediated via a common, limiting and single resource. However, in laboratory experiments with pathogens related to the genetic disease Cystic Fibrosis, species specific properties of production, inhibition and consumption of a metabolic by-product, acetate, were found. These assumptions were implemented into a mathematical chemostat model which consists of four nonlinear ordinary differential equations describing two species competing for one limiting nutrient in an open system. We derive classical chemostat results and find that our basic model supports the competitive exclusion principle, the bistability of the system as well as stable coexistence. The analytical results are illustrated by numerical simulations performed with experimentally measured parameter values. As a variant of our basic model, mimicking testing of antibiotics for therapeutic treatments in mixed cultures instead of pure ones, we consider the introduction of a lethal inhibitor, which cannot be eliminated by one of the species and is selective for the stronger competitor. We discuss our theoretical results in relation to our experimental model system and find that simulations coincide with the qualitative behavior of the experimental result in the case where the metabolic by-product serves as a second carbon source for one of the species, but not the producer.     

Tests of the simple model of Lin and Brandts for the folding kinetics of ribonuclease A

L.-N. Lin and J.F. Brandts recently proposed a simple model for the folding kinetics of ribonuclease A in which folding intermediates are not detectable. We have tested the basic assumption of the simple model for the major unfolded species, which is produced by a slow isomerization (the "X in equilibrium Y reaction" according to Lin and Brandts) after unfolding. The simple model assumes that in refolding the slow Y----X reaction must occur before any folding can take place. We have measured the Y----X reaction during folding. Tyrosine-detected folding occurs before the Y----X reaction; the difference in rate between the Y----X reaction and folding monitored by tyrosine absorbance becomes large when the stabilizing salt 0.56 M (NH4)2SO4 is added. The simple model predicts that the kinetic properties of the X in equilibrium Y reaction in unfolded ribonuclease are the same as those of tyrosine-detected folding. We find, however, that the kinetics of the X in equilibrium Y reaction in unfolded ribonuclease are independent of urea concentration, whereas the rate of tyrosine-detected folding decreases almost 100-fold between 0.3 and 5 M urea, as reported by Lin and Brandts. We point out that the kinetic properties of the X in equilibrium Y reaction in unfolded ribonuclease are characteristic of proline isomerization.     

Measurement and modification of forces between lecithin bilayers.

We probe in two different ways the competing attractive and repulsive forces that create lamellar arrays of the phospholipid lecithin when in equilibrium with pure water. The first probe involves the addition of low molecular weight solutes, glucose and sucrose, to a system where the phospholipid is immersed in a large excess of water. Small solutes can enter the aqueous region between bilayers. Their effect is first to increase and then to decrease the separation between bilayers as sugar concentration increases. We interpret this waxing and waning of the lattice spacing in terms of the successive weakening and strengthening of the attractive van der Waals forces originally responsible for creation of a stable lattice. The second probe is an "osmotic stress method," in which very high molecular weight neutral polymer is added to the pure water phase but is unable to enter the multilayers. The polymer competes for water with the lamellar lattice, and thereby compresses it. From the resulting spacing (determined by X-ray diffraction) and the directly measured osmotic pressure, we find a force vs. distance curve for compressing the lattice (or, equivalently, the free energy of transfer to bulk water of water between bilayers. This method reveals a very strong, exponentially varying "hydration force" with a decay distance of about 2 A.     

Autocatalytic networks with translation

We consider the kinetics of an autocatalytic reaction network in which replication and catalytic actions are separated by a translation step. We find that the behaviour of such a system is closely related to second-order replicator equations, which describe the kinetics of autocatalytic reaction networks in which the replicators act also as catalysts. In fact, the qualitative dynamics seems to be described almost entirely be the second-order reaction rates of the replication step. For two species we recover the qualitative dynamics of the replicator equations. Larger networks show some deviations, however. A hypercyclic system consisting of three interacting species can converge toward a stable limit cycle in contrast to the replicator equation case. A singular perturbation analysis shows that the replication-translation system reduces to a second-order replicator equation if translation is fast. The influence of mutations on replication-translation networks is also very similar to the behavior of selection-mutation equations.     

The two-locus model of Gaussian stabilizing selection

We study the equilibrium structure of a well-known two-locus model in which two diallelic loci contribute additively to a quantitative trait that is under Gaussian stabilizing selection. The population is assumed to be infinitely large, randomly mating, and having discrete generations. The two loci may have arbitrary effects on the trait, the strength of selection and the recombination rate may also be arbitrary. We find that 16 different equilibrium patterns exist, having up to 11 equilibria; up to seven interior equilibria may coexist, and up to four interior equilibria, three in negative and one in positive linkage disequilibrium, may be simultaneously stable. Also, two monomorphic and two fully polymorphic equilibria may be simultaneously stable. Therefore, the result of evolution may be highly sensitive to perturbations in the initial conditions or in the underlying genetic parameters. For the special case of equal effects, global stability results are proved. In the general case, we rely in part on numerical computations. The results are compared with previous analyses of the special case of extremely strong selection, of an approximate model that assumes linkage equilibrium, and of the much simpler quadratic optimum model.     

Local mate competition with lethal male combat: effects of competitive asymmetry and information availability on a sex ratio game

We constructed a sex allocation model for local mate competition considering the asymmetry of competitive abilities among sons. This model assumes two females of a parasitoid wasp oviposit on the same host in sequential order. The evolutionarily stable strategy will be in either Stackelberg or Nash equilibrium, depending on whether the females can recognize their opponent's sex ratio or not, respectively. The Nash equilibrium predicts the second female produce more males than the first. If the second female is able to know and respond to the strategy of the first (a Stackelberg equilibrium), the first will decide an optimal sex ratio assuming that the second reply to it. Under such an assumption, our model predicts that not producing sons is adaptive for the second female when the sons she produces have low competitive ability. Males of parasitoid wasps Melittobia spp. are engaged in lethal male-male combat, indicating large asymmetry in mating success among sons. If females have the ability to recognize their opponent's sex ratio, our model suggests that the severe lethal male-male combat may be one factor explaining their extremely female-biased sex ratio that is unexplainable by pre-existent models.     

Reverse engineering an amyloid aggregation pathway with dimensional analysis and scaling

Human islet amyloid polypeptide (hIAPP) is a cytotoxic protein that aggregates into oligomers and fibrils that kill pancreatic β-cells. Here we analyze hIAPP aggregation in vitro, measured via thioflavin-T fluorescence. We use mass-action kinetics and scaling analysis to reconstruct the aggregation pathway, and find that the initiation step requires four hIAPP monomers. After this step, monomers join the nucleus in pairs, until the first stable nucleus (of size approximately 20 monomers) is formed. This nucleus then elongates by successive addition of single monomers. We find that the best-fit of our data is achieved when we include a secondary fibril-dependent nucleation pathway in the reaction scheme. We predict how interventions that change rates of fibril elongation or nucleation rates affect the accumulation of potentially cytotoxic oligomer species. Our results demonstrate the power of scaling analysis in reverse engineering biochemical aggregation pathways.     

Fine Sampling of Sequence Space for Membrane Protein Structural Biology

We describe an enhancement of traditional genomics-based approaches to improve the success of structure determination of membrane proteins. Following a broad screen of sequence space to identify initial expression-positive targets, we employ a second step to select orthologs with closely related sequences to these hits. We demonstrate that a greater percentage of these latter targets express well and are stable in detergent, increasing the likelihood of identifying candidates that will ultimately yield structural information.     

State-dependent ideal free distributions

Summary The standard ideal free distribution (IFD) states how animals should distribute themselves at a stable competitive equilibrium. The equilibrium is stable because no animal can increase its fitness by changing its location. In applying the IFD to choice between patches of food, fitness has been identified with the net rate of energetic gain. In this paper we assess fitness in terms of survival during a non-reproductive period, where the animal may die as a result of starvation or predation. We find the IFD when there is a large population that can distribute itself between two patches of food. The IFD in this case is state-dependent, so that an animal's choice of patch depends on its energy reserves. Animals switch between patches as their reserves change and so the resulting IFD is a dynamic equilibrium. We look at two cases. In one there is no predation and the patches differ in their variability. In the other, patches differ in their predation risk. In contrast to previous IFDs, it is not necessarily true that anything is equalized over the two patches.     

Generation of a pH gradient in an immobilized enzyme system

Several examples of two-step sequential reactions exist where, because of the poor equilibrium conversion by the first reaction, it is desirable to conduct the two reactions simultaneously. In such a scheme, the product of the first reaction is continuously removed by the second reaction, thus not allowing the first reaction to approach chemical equilibrium. Therefore, the first reaction is allowed to proceed in the desired direction at an appreciable rate. However, in many biochemical applications where enzyme catalysts are involved, the enzyme's activities are strong functions of pH. Where the pH optima of the first and second reaction differ by three to four units, the above reaction scheme would be difficult to implement. In these cases, the two reactions can be separated by a thin permeable membrane across which the desired pH gradient is maintained. In this article, it was shown, both by theory and experiment, that a thin, flat membrane of immobilized urease can accomplish this goal when one face of the membrane is exposed to the acidic bulk solution (pH(b) = 4.5) containing a small quantity of urea (0.01 M). In this particular case, the ammonia that was produced in the membrane consumed the incoming hydrogen ions and thus maintained the desired pH gradient. Experimental results indicate that with sufficient urease loading, the face of the membrane opposite to the bulk solution could be maintained at a pH that would allow many enzymes to realize their maximum activities ( approximately 7.5). It was also found that this pH gradient could be maintained even in the presence of a buffer, which greatly enhances the transport of protons into the membrane. (c) 1993 John Wiley & Sons, Inc.