Judgments, forecasts and decisions: an analysis of fund managers over time

Decision theory is the study of models of judgement involved in, and leading to, deliberate and (usually) rational choice. In real estate investment there are normative models for the allocation of assets. These asset allocation models suggest an optimum allocation between the respective asset classes based on the investors’ judgements of performance and risk. Real estate is selected, as other assets, on the basis of some criteria, e.g. commonly its marginal contribution to the production of a mean variance efficient multi asset portfolio, subject to the investor’s objectives and capital rationing constraints. However, decisions are made relative to current expectations and current business constraints. Whilst a decision maker may believe in the required optimum exposure levels as dictated by an asset allocation model, the final decision may/will be influenced by factors outside the parameters of the mathematical model. This paper discusses investors' perceptions and attitudes toward real estate and highlights the important difference between theoretical exposure levels and pragmatic business considerations. It develops a model to identify “soft” parameters in decision making which will influence the optimal allocation for that asset class. This “soft” information may relate to behavioural issues such as the tendency to mirror competitors; a desire to meet weight of money objectives; a desire to retain the status quo and many other non-financial considerations. The paper aims to establish the place of property in multi asset portfolios in the UK and examine the asset allocation process in practice, with a view to understanding the decision making process and to look at investors’ perceptions based on an historic analysis of market expectation; a comparison with historic data and an analysis of actual performance.

Constraints on wave drag parameterization schemes for simulating the quasi-biennial oscillation. Part I: gravity wave forcing

Parameterization schemes for the drag due to atmospheric gravity waves are discussed and compared in the context of a simple one-dimensional model of the quasi-biennial oscillation (QBO). A number of fundamental issues are examined in detail, with the goal of providing a better understanding of the mechanism by which gravity wave drag can produce an equatorial zonal wind oscillation. The gravity wave–driven QBOs are compared with those obtained from a parameterization of equatorial planetary waves. In all gravity wave cases, it is seen that the inclusion of vertical diffusion is crucial for the descent of the shear zones and the development of the QBO. An important difference between the schemes for the two types of waves is that in the case of equatorial planetary waves, vertical diffusion is needed only at the lowest levels, while for the gravity wave drag schemes it must be included at all levels. The question of whether there is downward propagation of influence in the simulated QBOs is addressed. In the gravity wave drag schemes, the evolution of the wind at a given level depends on the wind above, as well as on the wind below. This is in contrast to the parameterization for the equatorial planetary waves in which there is downward propagation of phase only. The stability of a zero-wind initial state is examined, and it is determined that a small perturbation to such a state will amplify with time to the extent that a zonal wind oscillation is permitted.

Advances in the study of boundary value problems for nonlinear integrable PDEs

In this review I summarise some of the most significant advances of the last decade in the analysis and solution of boundary value problems for integrable partial differential equations in two independent variables. These equations arise widely in mathematical physics, and in order to model realistic applications, it is essential to consider bounded domain and inhomogeneous boundary conditions. I focus specifically on a general and widely applicable approach, usually referred to as the Unified Transform or Fokas Transform, that provides a substantial generalisation of the classical Inverse Scattering Transform. This approach preserves the conceptual efficiency and aesthetic appeal of the more classical transform approaches, but presents a distinctive and important difference. While the Inverse Scattering Transform follows the "separation of variables" philosophy, albeit in a nonlinear setting, the Unified Transform is a based on the idea of synthesis, rather than separation, of variables. I will outline the main ideas in the case of linear evolution equations, and then illustrate their generalisation to certain nonlinear cases of particular significance.

Symmetry breaking, mixing, instability, and low frequency variability in a minimal Lorenz-like system

Starting from the classical Saltzman two-dimensional convection equations, we derive via a severe spectral truncation a minimal 10 ODE system which includes the thermal effect of viscous dissipation. Neglecting this process leads to a dynamical system which includes a decoupled generalized Lorenz system. The consideration of this process breaks an important symmetry and couples the dynamics of fast and slow variables, with the ensuing modifications to the structural properties of the attractor and of the spectral features. When the relevant nondimensional number (Eckert number Ec) is different from zero, an additional time scale of O(Ec−1) is introduced in the system, as shown with standard multiscale analysis and made clear by several numerical evidences. Moreover, the system is ergodic and hyperbolic, the slow variables feature long-term memory with 1/f3/2 power spectra, and the fast variables feature amplitude modulation. Increasing the strength of the thermal-viscous feedback has a stabilizing effect, as both the metric entropy and the Kaplan-Yorke attractor dimension decrease monotonically with Ec. The analyzed system features very rich dynamics: it overcomes some of the limitations of the Lorenz system and might have prototypical value in relevant processes in complex systems dynamics, such as the interaction between slow and fast variables, the presence of long-term memory, and the associated extreme value statistics. This analysis shows how neglecting the coupling of slow and fast variables only on the basis of scale analysis can be catastrophic. In fact, this leads to spurious invariances that affect essential dynamical properties (ergodicity, hyperbolicity) and that cause the model losing ability in describing intrinsically multiscale processes.

G protein-coupled receptors: what a difference a 'partner' makes

G protein-coupled receptors (GPCRs) are important cell signaling mediators, involved in essential physiological processes. GPCRs respond to a wide variety of ligands from light to large macromolecules, including hormones and small peptides. Unfortunately, mutations and dysregulation of GPCRs that induce a loss of function or alter expression can lead to disorders that are sometimes lethal. Therefore, the expression, trafficking, signaling and desensitization of GPCRs must be tightly regulated by different cellular systems to prevent disease. Although there is substantial knowledge regarding the mechanisms that regulate the desensitization and down-regulation of GPCRs, less is known about the mechanisms that regulate the trafficking and cell-surface expression of newly synthesized GPCRs. More recently, there is accumulating evidence that suggests certain GPCRs are able to interact with specific proteins that can completely change their fate and function. These interactions add on another level of regulation and flexibility between different tissue/cell-types. Here, we review some of the main interacting proteins of GPCRs. A greater understanding of the mechanisms regulating their interactions may lead to the discovery of new drug targets for therapy.

Arabinose and protocatechuate catabolism genes are important for growth of Rhizobium leguminosarum biovar viciae in the pea rhizosphere

Background and aims: To form nitrogen-fixing nodules on pea roots, Rhizobium leguminosarum biovar viciae must be competitive in the rhizosphere. Our aim was to identify genes important for rhizosphere fitness. Methods: Signature-tagged mutants were screened using microarrays to identify mutants reduced for growth in pea rhizospheres. Candidate mutants were assessed relative to controls for growth in minimal medium, growth in pea rhizospheres and for infection of peas in mixed inoculants. Mutated genes were identified by DNA sequencing and confirmed by transduction. Results: Of 5508 signature-tagged mutants, microarrays implicated 50 as having decreased rhizosphere fitness. Growth tests identified six mutants with rhizosphere-specific phenotypes. The mutation in one of the genes (araE) was in an arabinose catabolism operon and blocked growth on arabinose. The mutation in another gene (pcaM), encoding a predicted solute binding protein for protocatechuate and hydroxybenzoate uptake, decreased growth on protocatechuate. Both mutants were decreased for nodule infection competitiveness with mixed inoculants, but nodulated peas normally when inoculated alone. Other mutants with similar phenotypes had mutations predicted to affect secondary metabolism. Conclusions: Catabolism of arabinose and protocatechuate in the pea rhizosphere is important for competitiveness of R.l. viciae. Other genes predicted to be involved in secondary metabolism are also important.

Minimal regulation of platelet activity by PECAM-1.

PECAM-1 is a member of the superfamily of immunoglobulins (Ig) and is expressed on platelets at moderate level. PECAM-1 has been reported to have contrasting effects on platelet activation by the collagen receptor GPVI and the integrin, alphaIIbbeta3, even though both receptors signal through Src-kinase regulation of PLCgamma2. The present study compares the role of PECAM-1 on platelet activation by these two receptors and by the lectin receptor, CLEC-2, which also signals via PLCgamma2. Studies using PECAM-1 knockout-mice and cross-linking of PECAM-1 using specific antibodies demonstrated a minor inhibitory role on platelet responses to the above three receptors and also under some conditions to the G-protein agonist thrombin. The degree of inhibition was considerably less than that produced by PGI2, which elevates cAMP. There was no significant difference in thrombus formation on collagen in PECAM-1-/- platelets relative to litter-matched controls. The very weak inhibitory effect of PECAM-1 on platelet activation relative to that of PGI2 indicate that the Ig-receptor is not a major regulator of platelet activation. PECAM-1 has been reported to have contrasting effects on platelet activation. The present study demonstrates a very mild or negligible effect on platelet activation in response to stimulation by a variety of agonists, thereby questioning the physiological role of the immunoglobulin receptor as a major regulator of platelet activation.