Do prediction markets produce well-calibrated probability forecasts?

This article presents new theoretical and empirical evidence on the forecasting ability of prediction markets. We develop a model that predicts that the time until expiration of a prediction market should negatively affect the accuracy of prices as a forecasting tool in the direction of a ‘favourite/longshot bias’. That is, high-likelihood events are underpriced, and low-likelihood events are over-priced. We confirm this result using a large data set of prediction market transaction prices. Prediction markets are reasonably well calibrated when time to expiration is relatively short, but prices are significantly biased for events farther in the future. When time value of money is considered, the miscalibration can be exploited to earn excess returns only when the trader has a relatively low discount rate.

A flexible optimisation model for the railway crew scheduling problem

Addressing the Crew Scheduling Problem (CSP) in transportation systems can be too complex to capture all details. The designed models usually ignore or simplify features which are difficult to formulate. This paper proposes an alternative formulation using a Mixed Integer Programming (MIP) approach to the problem. The optimisation model integrates the two phases of pairing generation and pairing optimisation by simultaneously sequencing trips into feasible duties and minimising total elapsed time of any duty. Crew scheduling constraints in which the crew have to return to their home depot at the end of the shift are included in the model. The flexibility of this model comes in the inclusion of the time interval of relief opportunities, allowing the crew to be relieved during a finite time interval. This will enhance the robustness of the schedule and provide a better representation of real-world conditions.

The effects of flexible fixation on early stage bone fracture healing

The mechanical microenvironment at a fracture site could potentially influence the outcomes of bone fracture healing. It is known that, should the fixation construct be too stiff, or the gap between the fracture ends be too large, bones are less likely to heal. Flexible fixation or so-called “biological fixation” has been shown to encourage the formation of fracture callus, and therefore result in better healing outcomes. However, till date the nature of the relationship between the degree of mechanical stability provided by a flexible fixation and optimal healing fracture healing outcomes has not been fully understood. This paper presents a computational model that can predict healing out-comes from early stage healing data under various fixation configurations. The results of the simulations demonstrate that the change of mechanical microenvironment of fracture site resulting from the different fixation configurations is of importance for the healing outcomes.

Time-domain hydroelastic analysis of a flexible marine structure using state-space models

This article deals with time-domain hydroelastic analysis of a marine structure. The convolution terms associated with fluid memory effects are replaced by an alternative state-space representation, the parameters of which are obtained by using realization theory. The mathematical model established is validated by comparison to experimental results of a very flexible barge. Two types of time-domain simulations are performed: dynamic response of the initially inert structure to incident regular waves and transient response of the structure after it is released from a displaced condition in still water. The accuracy and the efficiency of the simulations based on the state-space model representations are compared to those that integrate the convolutions.

Flexible service systems

Service science combines scientific, management, and engineering disciplines to improve the understanding of how service systems cooperate to create business value. Service systems are complex configurations of people, technologies, and resources that coexist in a common environment of service provisioning. While the general concepts of service science are understood and agreed upon, the representation of service systems using models is still in its infancy. In this chapter, we look at business processes and their role in properly representing service systems. We propose flexible process graphs, a high-level process modeling language, and extend it in order to specify service systems and their compositions within shared environments in a flexible way. The discussion in this chapter is the first step towards a formal description of service science environment, including service systems, networks, and whole ecology.

Flexible process graph : a prologue

Businesses document their operational processes as process models. The common practice is to represent process models as directed graphs. The nodes of a process graph represent activities and directed edges constitute activity ordering constraints. A flexible process graph modeling approach proposes to generalize process graph structure to a hypergraph. Obtained process structure aims at formalization of ad-hoc process control flow. In this paper we discuss aspects relevant to concurrent execution of process activities in a collaborative manner organized as a flexible process graph. We provide a real world flexible process scenario to illustrate the approach.

pGreen : a versatile and flexible binary Ti vector for Agrobacterium-mediated plant transformation

Binary Ti vectors are the plasmid vectors of choice in Agrobacterium-mediated plant transformation protocols. The pGreen series of binary Ti vectors are configured for ease-of-use and to meet the demands of a wide range of transformation procedures for many plant species. This plasmid system allows any arrangement of selectable marker and reporter gene at the right and left T-DNA borders without compromising the choice of restriction sites for cloning, since the pGreen cloning sites are based on the well-known pBluescript general vector plasmids. Its size and copy number in Escherichia coli offers increased efficiencies in routine in vitro recombination procedures. pGreen can replicate in Agrobacterium only if another plasmid, pSoup, is co-resident in the same strain. pSoup provides replication functions in trans for pGreen. The removal of RepA and Mob functions has enabled the size of pGreen to be kept to a minimum. Versions of pGreen have been used to transform several plant species with the same efficiencies as other binary Ti vectors. Information on the pGreen plasmid system is supplemented by an Internet site (http://www.pgreen.ac.uk) through which comprehensive information, protocols, order forms and lists of different pGreen marker gene permutations can be found.

Z-source-inverter-based flexible distributed generation system solution for grid power quality improvement

Distributed generation (DG) systems are usually connected to the grid using power electronic converters. Power delivered from such DG sources depends on factors like energy availability and load demand. The converters used in power conversion do not operate with their full capacity all the time. The unused or remaining capacity of the converters could be used to provide some ancillary functions like harmonic and unbalance mitigation of the power distribution system. As some of these DG sources have wide operating ranges, they need special power converters for grid interfacing. Being a single-stage buck-boost inverter, recently proposed Z-source inverter (ZSI) is a good candidate for future DG systems. This paper presents a controller design for a ZSI-based DG system to improve power quality of distribution systems. The proposed control method is tested with simulation results obtained using Matlab/Simulink/PLECS and subsequently it is experimentally validated using a laboratory prototype.

Creating flexible mappings between building information models and cost information

During the early design stages of construction projects, accurate and timely cost feedback is critical to design decision making. This is particularly challenging for cost estimators, as they must quickly and accurately estimate the cost of the building when the design is still incomplete and evolving. State-of-the-art software tools typically use a rule-based approach to generate detailed quantities from the design details present in a building model and relate them to the cost items in a cost estimating database. In this paper, we propose a generic approach for creating and maintaining a cost estimate using flexible mappings between a building model and a cost estimate. The approach uses queries on the building design that are used to populate views, and each view is then associated with one or more cost items. The benefit of this approach is that the flexibility of modern query languages allows the estimator to encode a broad variety of relationships between the design and estimate. It also avoids the use of a common standard to which both designers and estimators must conform, allowing the estimator added flexibility and functionality to their work.

The phenomenological approach : a framework to design markets

An approach is proposed and applied to five industries to prove how phenomenology can be valuable in rethinking consumer markets (Popp & Holt, 2013). The purpose of this essay is to highlight the potential implications that 'phenomenological thinking' brings for competitiveness and innovation (Sanders, 1982), hence helping managers being more innovative in their strategic marketing decisions (i.e. market creation, positioning, branding). Phenomenology is in fact a way of thinking − besides and before being a qualitative research procedure − a very practical exercise that strategic managers can master and apply in the same successful way as other scientists have already done in their fields of study (e.g. sociology, psychology, psychiatry, and anthropology). Two fundamental considerations justify this research: a lack of distinctiveness among firms due to high levels of competition and consumers no longer knowing what they want (i.e. no more needs). The authors will show how the classical mental framework generally used to study markets by practitioners appears on the one hand to be established and systematic in the life of a company, while on the other is no longer adequate to meet the needs of innovation required to survive. To the classic principles of objectivity, generality, and psycho-sociology the authors counterpose the imaginary, eidetic-phenomenological reduction, and an existential perspective. From a theoretical point of view, this paper introduces a set of functioning rules applicable to achieve innovation in any market and useful to identify cultural practices inherent in the act of consumption.

Linkages among the US energy futures markets

This study investigates the price linkage among the US major energy sources, considering structural breaks in time series, to provide information for diversifying the US energy sources. We find that only a weak linkage sustains among crude oil, gasoline, heating oil, coal, natural gas, uranium and ethanol futures prices. This implies that the US major energy source markets are not integrated as one primary energy market. Our tests also reveal that uranium and ethanol futures prices have very weak linkages with other major energy source prices. This indicates that the US energy market is still at a stage where none of the probable alternative energy source markets are playing the role as substitute or complement markets for the fossil fuel energy markets.

Correlations and volatility spillovers across commodity and stock markets: Linking energies, food, and gold

This paper employs a VAR-GARCH model to investigate the return links and volatility transmission between the S&P 500 and commodity price indices for energy, food, gold and beverages over the turbulent period from 2000 to 2011. Understanding the price behavior of commodity prices and the volatility transmission mechanism between these markets and the stock exchanges are crucial for each participant, including governments, traders, portfolio managers, consumers, and producers. For return and volatility spillover, the results show significant transmission among the S&P 500 and commodity markets. The past shocks and volatility of the S&P 500 strongly influenced the oil and gold markets. This study finds that the highest conditional correlations are between the S&P 500 and gold index and the S&P 500 and WTI index. We also analyze the optimal weights and hedge ratios for commodities/S&P 500 portfolio holdings using the estimates for each index. Overall, our findings illustrate several important implications for portfolio hedgers for making optimal portfolio allocations, engaging in risk management and forecasting future volatility in equity and commodity markets. © 2013 Elsevier B.V.

Tests on price linkage between the U.S. and Japanese gold and silver futures markets

We tested the price linkage, the law of one price (LOP) condition, and the causality of the price linkage between the U.S. and Japanese gold and silver futures markets with consideration of structural breaks in the price series. The LOP condition did not hold for both the gold and silver markets when structural breaks were not considered but it sustained in some periods when it was tested for the break periods. We found from the causality test that the price linkage between the U.S. and Japanese gold and silver futures markets were led by the U.S. market.