The Myth of the Rational Market: Nudging Each Other Away from Fool’s Gold

A flurry of media commentary and several new books are focused on the recent financial crisis and near economic collapse. A Newsweek article by Zakaria (2009), “Greed is Good (To a Point),” suggests reconsidering the role of greed in capitalism. This is also the theme in Fools Gold (Tett, 2009), a story about the way derivatives markets have evolved: showing greed at its worst. In many ways this is the core source of the current set of problems. In some sense, these perspectives are integrated in The Myth of the Rational Market by Fox (2009), who traces the thinking on the efficient market hypothesis, now understood for what it is: a myth. Both books are based in large part on interviews with major players in the crisis. There are also books drawing mainly on science, but still quite accessible to general readers, as represented in Nudge by Thaler and Sunstein (2008). Both have done extensive research on human foibles in economic choice. There is also Animal Spirits (Akerlof and Schiller, 2009), a book about what Keynesian economics is really about, a look at human forces at work. Akerlof is a Nobel prize winner in economics, who before this has pointed to the problems with presuming rationality in real markets. Schiller is one of the few economists who predicted these events.

Allosteric regulation of the primase (DnaG) activity by the clamp-loader (τ) in vitro

During DNA replication the helicase (DnaB) recruits the primase (DnaG) in the replisome to initiate the polymerization of new DNA strands. DnaB is attached to the τ subunit of the clamp-loader that loads the β clamp and interconnects the core polymerases on the leading and lagging strands. The τ–DnaB−DnaG ternary complex is at the heart of the replisome and its function is likely to be modulated by a complex network of allosteric interactions. Using a stable ternary complex comprising the primase and helicase from Geobacillus stearothermophilus and the τ subunit of the clamp-loader from Bacillus subtilis we show that changes in the DnaB–τ interaction can stimulate allosterically primer synthesis by DnaG in vitro. The A550V τ mutant stimulates the primase activity more efficiently than the native protein. Truncation of the last 18 C-terminal residues of τ elicits a DnaG-stimulatory effect in vitro that appears to be suppressed in the native τ protein. Thus changes in the τ–DnaB interaction allosterically affect primer synthesis. Although these C-terminal residues of τ are not involved directly in the interaction with DnaB, they may act as a functional gateway for regulation of primer synthesis by τ-interacting components of the replisome through the τ–DnaB−DnaG pathway.