Frontiers of finance: Evolution and efficient markets

In this review article, we explore several recent advances in the quantitative modeling of financial markets. We begin with the Efficient Markets Hypothesis and describe how this controversial idea has stimulated a number of new directions of research, some focusing on more elaborate mathematical models that are capable of rationalizing the empirical facts, others taking a completely different tack in rejecting rationality altogether. One of the most promising directions is to view financial markets from a biological perspective and, specifically, within an evolutionary framework in which markets, instruments, institutions, and investors interact and evolve dynamically according to the “law” of economic selection. Under this view, financial agents compete and adapt, but they do not necessarily do so in an optimal fashion. Evolutionary and ecological models of financial markets is truly a new frontier whose exploration has just begun.

Small viscosity asymptotics for the inertial range of local structure and for the wall region of wall-bounded turbulent shear flow.

The small viscosity asymptotics of the inertial range of local structure and of the wall region in wallbounded turbulent shear flow are compared. The comparison leads to a sharpening of the dichotomy between Reynolds number dependent scaling (power-type) laws and the universal Reynolds number independent logarithmic law in wall turbulence. It further leads to a quantitative prediction of an essential difference between them, which is confirmed by the results of a recent experimental investigation. These results lend support to recent work on the zero viscosity limit of the inertial range in turbulence.

The kappa-opioid receptor is primarily postsynaptic: combined immunohistochemical localization of the receptor and endogenous opioids.

Antisera were raised against a synthetic peptide corresponding to the carboxyl terminus of the kappa-opioid receptor (KOR1). Specificity of the antisera was verified by staining of COS-7 cells transfected with KOR1 and epitope-tagged KOR1 cDNAs, by recognition by the antisera of proteins on Western blots of both transfected cells and brain tissue, by the absence of staining of both brain tissue and transfected cells after preabsorption of the antisera with the cognate peptide, and on the strong correlation between the distribution of KOR1 immunoreactivity and that of earlier ligand binding and in situ hybridization studies. Results indicate that KOR1 in neurons is targeted into both the axonal and somatodendritic compartments, but the majority of immunostaining was seen in the somatodendritic compartment. In sections from rat and guinea pig brain, prominent KOR1 staining was seen in the ventral forebrain, hypothalamus, thalamus, posterior pituitary, and midbrain. While the staining pattern was similar in both species, distinct differences were also observed. The distribution of preprodynorphin and KOR1 immunoreactivity was complementary in many brain regions, suggesting that KOR1 is poised to mediate the physiological actions of dynorphin. However, the distribution of KOR1 and enkephalin immunoreactivity was complementary in some regions as well. These results suggest that the KOR1 protein is primarily, but not exclusively, deployed to postsynaptic membranes where it mediates the effects of products of preprodynorphin and possibly preproenkephalin.