A trading strategy based on the lead–lag relationship between the spot index and futures contract for the FTSE 100

This paper examines the lead–lag relationship between the FTSE 100 index and index futures price employing a number of time series models. Using 10-min observations from June 1996–1997, it is found that lagged changes in the futures price can help to predict changes in the spot price. The best forecasting model is of the error correction type, allowing for the theoretical difference between spot and futures prices according to the cost of carry relationship. This predictive ability is in turn utilised to derive a trading strategy which is tested under real-world conditions to search for systematic profitable trading opportunities. It is revealed that although the model forecasts produce significantly higher returns than a passive benchmark, the model was unable to outperform the benchmark after allowing for transaction costs.

The anterior temporal lobes support residual comprehension in Wernicke’s aphasia

Wernicke’s aphasia occurs following a stroke to classical language comprehension regions in the left temporoparietal cortex. Consequently, auditory-verbal comprehension is significantly impaired in Wernicke’s aphasia but the capacity to comprehend visually presented materials (written words and pictures) is partially spared. This study used fMRI to investigate the neural basis of written word and picture semantic processing in Wernicke’s aphasia, with the wider aim of examining how the semantic system is altered following damage to the classical comprehension regions. Twelve participants with Wernicke’s aphasia and twelve control participants performed semantic animate-inanimate judgements and a visual height judgement baseline task. Whole brain and ROI analysis in Wernicke’s aphasia and control participants found that semantic judgements were underpinned by activation in the ventral and anterior temporal lobes bilaterally. The Wernicke’s aphasia group displayed an “over-activation” in comparison to control participants, indicating that anterior temporal lobe regions become increasingly influential following reduction in posterior semantic resources. Semantic processing of written words in Wernicke’s aphasia was additionally supported by recruitment of the right anterior superior temporal lobe, a region previously associated with recovery from auditory-verbal comprehension impairments. Overall, the results concord with models which indicate that the anterior temporal lobes are crucial for multimodal semantic processing and that these regions may be accessed without support from classic posterior comprehension regions.

English Contract Law and the Great War: the development of a doctrine of frustration

This article examines changes that occurred in English contract law as a result of the demands made upon Great Britain by the Great War. The focus is on the development of the doctrine of frustration in English law. In particular, it is argued that the development of the doctrine of frustration was fashioned from internal legal forces in the form of both existing case law and emergency legislation in response to the demands placed upon the nation by a global war. The way in which the doctrine of frustration developed during the Great War arose as a direct result of the way in which Britain chose to meet the logistical demands created by the way it fought the Great War.

Training and the commitment of outsourced information technologies' workers: psychological contract fulfillment as a mediator

Outsourced workers in information technologies (IT) generally have high skills and a high value on the job market. Their IT outsourcing organizations are likely to provide them with training, in the first place for skill development, but perhaps also as a way to bind the workers to them. This can be understood along the role of the psychological contract. Outsourced IT workers may see training as a fulfillment of their psychological contract. Accordingly, we hypothesize that psychological contract fulfillment mediates the relationship between training and affective commitment to the IT outsourcer. This was tested in a sample of 158 Portuguese outsourced IT workers. The results showed that employees who considered that they were receiving good training opportunities felt a greater affective commitment to their IT outsourcers. This relationship was mediated by the fulfillment of the relational psychological contract.

Breaching the social contract: crises of democratic representation and patterns of extreme right party support

Why has the extreme right Greek Golden Dawn, a party with clear links to fascism experienced a rise defying all theories that claim that such a party is unlikely to win in post-WWII Europe? And, if we accept that economic crisis is an explanation for this, why has such a phenomenon not occurred in other countries that have similar conducive conditions, such as Portugal and Spain? This article addresses this puzzle by (a) carrying out a controlled comparison of Greece, Portugal and Spain and (b) showing that the rise of the extreme right is not a question of intensity of economic crisis. Rather it is the nature of the crisis, i.e. economic versus overall crisis of democratic representation that facilitates the rise of the extreme right. We argue that extreme right parties are more likely to experience an increase in their support when economic crisis culminates into an overall crisis of democratic representation. Economic crisis is likely to become a political crisis when severe issues of governability impact upon the ability of the state to fulfil its social contract obligations. This breach of the social contract is accompanied by declining levels of trust in state institutions, resulting in party system collapse.

Second language influence on first language motion event encoding and categorization in Spanish-speaking children learning L2 English

Studies show cross-linguistic differences in motion event encoding, such that English speakers preferentially encode manner of motion more than Spanish speakers, who preferentially encode path of motion. Focusing on native Spanish speaking children (aged 5;00-9;00) learning L2 English, we studied path and manner verb preferences during descriptions of motion stimuli, and tested the linguistic relativity hypothesis by investigating categorization preferences in a non-verbal similarity judgement task of motion clip triads. Results revealed L2 influence on L1 motion event encoding, such that bilinguals used more manner verbs and fewer path verbs in their L1, under the influence of English. We found no effects of linguistic structure on non-verbal similarity judgements, and demonstrate for the first time effects of L2 on L1 lexicalization in child L2 learners in the domain of motion events. This pattern of verbal behaviour supports theories of bilingual semantic representation that postulate a merged lexico-semantic system in early bilinguals.

Economic evidence in regulatory disputes: revisiting the court-regulatory agency relationship in the US and the UK

This article examines the issue of the appropriate scope of review of economic evidence enshrined in the discretionary assessments of utility regulators in the US and the UK. It advances a balance of institutional competencies approach to the question of the degree of deference owed to the regulatory agency’s economic assessments. In doing so, it revisits the doctrinal positions advanced in the US and UK for the substantive review of administrative discretion, so as to become attuned to the challenges posed by economic evidence. Drawing on insights from political science and economics, the suggested approach illuminates the institutional disadvantages of the courts that may warrant a high degree of deference. At the same time, however, it remains sensitive to the polycentric elements of regulatory disputes as well as to a number of institutional realties that may attenuate the weight of such comparative institutional disadvantages.

Endogenous managerial compensation contracts in experimental quantity-setting duopolies

Given the ongoing debate on managerial compensation schemes, our paper offers empirical insights on the strategic choice of firms' owners over the terms of a managerial compensation contract, as a commitment device aiming at gaining competitive advantage in the product market. In a quantity setting duopoly we experimentally test whether firms' owners compensate their managers through contracts combining own profits either with revenues or with relative performance, and the resulting managerial behaviour in the product market. Prominent among our results is that firms' owners choose relative performance over profit revenue contracts more frequently. Further, firms' owners successfully induce a more aggressive behaviour by their managers in the market, by setting incentives which deviate from strict profit maximization.

Quick abnormal-bid-detection method for construction contract auctions

Noncompetitive bids have recently become a major concern in both public and private sector construction contract auctions. Consequently, several models have been developed to help identify bidders potentially involved in collusive practices. However, most of these models require complex calculations and extensive information that is difficult to obtain. The aim of this paper is to utilize recent developments for detecting abnormal bids in capped auctions (auctions with an upper bid limit set by the auctioner) and extend them to the more conventional uncapped auctions (where no such limits are set). To accomplish this, a new method is developed for estimating the values of bid distribution supports by using the solution to what has become known as the German Tank problem. The model is then demonstrated and tested on a sample of real construction bid data, and shown to detect cover bids with high accuracy. This paper contributes to an improved understanding of abnormal bid behavior as an aid to detecting and monitoring potential collusive bid practices.

Scoring rules and abnormally low bids criteria in construction tenders: a taxonomic review

In the global construction context, the best value or most economically advantageous tender is becoming a widespread approach for contractor selection, as an alternative to other traditional awarding criteria such as the lowest price. In these multi-attribute tenders, the owner or auctioneer solicits proposals containing both a price bid and additional technical features. Once the proposals are received, each bidder’s price bid is given an economic score according to a scoring rule, generally called an economic scoring formula (ESF) and a technical score according to pre-specified criteria. Eventually, the contract is awarded to the bidder with the highest weighted overall score (economic + technical). However, economic scoring formula selection by auctioneers is invariably and paradoxically a highly intuitive process in practice, involving few theoretical or empirical considerations, despite having been considered traditionally and mistakenly as objective, due to its mathematical nature. This paper provides a taxonomic classification of a wide variety of ESFs and abnormally low bids criteria (ALBC) gathered in several countries with different tendering approaches. Practical implications concern the optimal design of price scoring rules in construction contract tenders, as well as future analyses of the effects of the ESF and ALBC on competitive bidding behaviour.

Improving the estimation of probability of bidder participation in procurement auctions

Anticipating the number and identity of bidders has significant influence in many theoretical results of the auction itself and bidders' bidding behaviour. This is because when a bidder knows in advance which specific bidders are likely competitors, this knowledge gives a company a head start when setting the bid price. However, despite these competitive implications, most previous studies have focused almost entirely on forecasting the number of bidders and only a few authors have dealt with the identity dimension qualitatively. Using a case study with immediate real-life applications, this paper develops a method for estimating every potential bidder's probability of participating in a future auction as a function of the tender economic size removing the bias caused by the contract size opportunities distribution. This way, a bidder or auctioner will be able to estimate the likelihood of a specific group of key, previously identified bidders in a future tender.

Disparity-defined objects moving in depth do not elicit three-dimensional shape constancy

Observers generally fail to recover three-dimensional shape accurately from binocular disparity. Typically, depth is overestimated at near distances and underestimated at far distances [Johnston, E. B. (1991). Systematic distortions of shape from stereopsis. Vision Research, 31, 1351–1360]. A simple prediction from this is that disparity-defined objects should appear to expand in depth when moving towards the observer, and compress in depth when moving away. However, additional information is provided when an object moves from which 3D Euclidean shape can be recovered, be this through the addition of structure from motion information [Richards, W. (1985). Structure from stereo and motion. Journal of the Optical Society of America A, 2, 343–349], or the use of non-generic strategies [Todd, J. T., & Norman, J. F. (2003). The visual perception of 3-D shape from multiple cues: Are observers capable of perceiving metric structure? Perception and Psychophysics, 65, 31–47]. Here, we investigated shape constancy for objects moving in depth. We found that to be perceived as constant in shape, objects needed to contract in depth when moving toward the observer, and expand in depth when moving away, countering the effects of incorrect distance scaling (Johnston, 1991). This is a striking example of the failure of shape con- stancy, but one that is predicted if observers neither accurately estimate object distance in order to recover Euclidean shape, nor are able to base their responses on a simpler processing strategy.