The lottery-panel task for bi-dimensional parameter-free elicitation of risk attitudes

We propose first, a simple task for the eliciting attitudes toward risky choice, the SGG lottery-panel task, which consists in a series of lotteries constructed to compensate riskier options with higher risk-return trade-offs. Using Principal Component Analysis technique, we show that the SGG lottery-panel task is capable of capturing two dimensions of individual risky decision making i.e. subjects’ average risk taking and their sensitivity towards variations in risk-return. From the results of a large experimental dataset, we confirm that the task systematically captures a number of regularities such as: A tendency to risk averse behavior (only around 10% of choices are compatible with risk neutrality); An attraction to certain payoffs compared to low risk lotteries, compatible with over-(under-) weighting of small (large) probabilities predicted in PT and; Gender differences, i.e. males being consistently less risk averse than females but both genders being similarly responsive to the increases in risk-premium. Another interesting result is that in hypothetical choices most individuals increase their risk taking responding to the increase in return to risk, as predicted by PT, while across panels with real rewards we see even more changes, but opposite to the expected pattern of riskier choices for higher risk-returns. Therefore, we conclude from our data that an “economic anomaly” emerges in the real reward choices opposite to the hypothetical choices. These findings are in line with Camerer's (1995) view that although in many domains, paid subjects probably do exert extra mental effort which improves their performance, choice over money gambles is not likely to be a domain in which effort will improve adherence to rational axioms (p. 635). Finally, we demonstrate that both dimensions of risk attitudes, average risk taking and sensitivity towards variations in the return to risk, are desirable not only to describe behavior under risk but also to explain behavior in other contexts, as illustrated by an example. In the second study, we propose three additional treatments intended to elicit risk attitudes under high stakes and mixed outcome (gains and losses) lotteries. Using a dataset obtained from a hypothetical implementation of the tasks we show that the new treatments are able to capture both dimensions of risk attitudes. This new dataset allows us to describe several regularities, both at the aggregate and within-subjects level. We find that in every treatment over 70% of choices show some degree of risk aversion and only between 0.6% and 15.3% of individuals are consistently risk neutral within the same treatment. We also confirm the existence of gender differences in the degree of risk taking, that is, in all treatments females prefer safer lotteries compared to males. Regarding our second dimension of risk attitudes we observe, in all treatments, an increase in risk taking in response to risk premium increases. Treatment comparisons reveal other regularities, such as a lower degree of risk taking in large stake treatments compared to low stake treatments and a lower degree of risk taking when losses are incorporated into the large stake lotteries. Results that are compatible with previous findings in the literature, for stake size effects (e.g., Binswanger, 1980; Antoni Bosch-Domènech & Silvestre, 1999; Hogarth & Einhorn, 1990; Holt & Laury, 2002; Kachelmeier & Shehata, 1992; Kühberger et al., 1999; B. J. Weber & Chapman, 2005; Wik et al., 2007) and domain effect (e.g., Brooks and Zank, 2005, Schoemaker, 1990, Wik et al., 2007). Whereas for small stake treatments, we find that the effect of incorporating losses into the outcomes is not so clear. At the aggregate level an increase in risk taking is observed, but also more dispersion in the choices, whilst at the within-subjects level the effect weakens. Finally, regarding responses to risk premium, we find that compared to only gains treatments sensitivity is lower in the mixed lotteries treatments (SL and LL). In general sensitivity to risk-return is more affected by the domain than the stake size. After having described the properties of risk attitudes as captured by the SGG risk elicitation task and its three new versions, it is important to recall that the danger of using unidimensional descriptions of risk attitudes goes beyond the incompatibility with modern economic theories like PT, CPT etc., all of which call for tests with multiple degrees of freedom. Being faithful to this recommendation, the contribution of this essay is an empirically and endogenously determined bi-dimensional specification of risk attitudes, useful to describe behavior under uncertainty and to explain behavior in other contexts. Hopefully, this will contribute to create large datasets containing a multidimensional description of individual risk attitudes, while at the same time allowing for a robust context, compatible with present and even future more complex descriptions of human attitudes towards risk.

Predictability of large interannual Arctic sea-ice anomalies

In projections of twenty-first century climate, Arctic sea ice declines and at the same time exhibits strong interannual anomalies. Here, we investigate the potential to predict these strong sea-ice anomalies under a perfect-model assumption, using the Max-Planck-Institute Earth System Model in the same setup as in the Coupled Model Intercomparison Project Phase 5 (CMIP5). We study two cases of strong negative sea-ice anomalies: a 5-year-long anomaly for present-day conditions, and a 10-year-long anomaly for conditions projected for the middle of the twenty-first century. We treat these anomalies in the CMIP5 projections as the truth, and use exactly the same model configuration for predictions of this synthetic truth. We start ensemble predictions at different times during the anomalies, considering lagged-perfect and sea-ice-assimilated initial conditions. We find that the onset and amplitude of the interannual anomalies are not predictable. However, the further deepening of the anomaly can be predicted for typically 1 year lead time if predictions start after the onset but before the maximal amplitude of the anomaly. The magnitude of an extremely low summer sea-ice minimum is hard to predict: the skill of the prediction ensemble is not better than a damped-persistence forecast for lead times of more than a few months, and is not better than a climatology forecast for lead times of two or more years. Predictions of the present-day anomaly are more skillful than predictions of the mid-century anomaly. Predictions using sea-ice-assimilated initial conditions are competitive with those using lagged-perfect initial conditions for lead times of a year or less, but yield degraded skill for longer lead times. The results presented here suggest that there is limited prospect of predicting the large interannual sea-ice anomalies expected to occur throughout the twenty-first century.

Seasonality in Southeast Asian stock markets: some new evidence on day-of-the-week effects

This paper examines the evidence for a day-of-the-week effect in five Southeast Asian stock markets: South Korea, Malaysia, the Philippines, Taiwan and Thailand. Findings indicate significant seasonality for three of the five markets. Market risk, proxied by the return on the FTA World Price Index, is not sufficient to explain this calendar anomaly. Although an extension of the risk-return equation to incorporate interactive seasonal dummy variables can explain some significant day-of-the-week effects, market risk alone appears insufficient to characterize this phenomenon.

Decadal predictions of the cooling and freshening of the North Atlantic in the 1960s and the role of ocean circulation

In the 1960s North Atlantic sea surface temperatures (SST) cooled rapidly. The magnitude of the cooling was largest in the North Atlantic subpolar gyre (SPG), and was coincident with a rapid freshening of the SPG. Here we analyze hindcasts of the 1960s North Atlantic cooling made with the UK Met Office’s decadal prediction system (DePreSys), which is initialised using observations. It is shown that DePreSys captures—with a lead time of several years—the observed cooling and freshening of the North Atlantic SPG. DePreSys also captures changes in SST over the wider North Atlantic and surface climate impacts over the wider region, such as changes in atmospheric circulation in winter and sea ice extent. We show that initialisation of an anomalously weak Atlantic Meridional Overturning Circulation (AMOC), and hence weak northward heat transport, is crucial for DePreSys to predict the magnitude of the observed cooling. Such an anomalously weak AMOC is not captured when ocean observations are not assimilated (i.e. it is not a forced response in this model). The freshening of the SPG is also dominated by ocean salt transport changes in DePreSys; in particular, the simulation of advective freshwater anomalies analogous to the Great Salinity Anomaly were key. Therefore, DePreSys suggests that ocean dynamics played an important role in the cooling of the North Atlantic in the 1960s, and that this event was predictable.

An anatomy of the cooling of the North Atlantic Ocean in the 1960s and 1970s

In the 1960s and early 1970s sea surface temperatures in the North Atlantic Ocean cooled rapidly. There is still considerable uncertainty about the causes of this event, although various mechanisms have been proposed. In this observational study it is demonstrated that the cooling proceeded in several distinct stages. Cool anomalies initially appeared in the mid-1960s in the Nordic Seas and Gulf Stream Extension, before spreading to cover most of the Subpolar Gyre. Subsequently, cool anomalies spread into the tropical North Atlantic before retreating, in the late 1970s, back to the Subpolar Gyre. There is strong evidence that changes in atmospheric circulation, linked to a southward shift of the Atlantic ITCZ, played an important role in the event, particularly in the period 1972-76. Theories for the cooling event must account for its distinctive space-time evolution. Our analysis suggests that the most likely drivers were: 1) The “Great Salinity Anomaly” of the late 1960s; 2) An earlier warming of the subpolar North Atlantic, which may have led to a slow-down in the Atlantic Meridional Overturning Circulation; 3) An increase in anthropogenic sulphur dioxide emissions. Determining the relative importance of these factors is a key area for future work.

Transient atmospheric response to interactive SST anomalies

The transient atmospheric response to interactive SST anomalies in the midlatitudes is investigated using a three-layer QG model coupled in perpetual winter conditions to a slab oceanic mixed layer in the North Atlantic. The SST anomalies are diagnosed from a coupled run and prescribed as initial conditions, but are free to evolve. The initial evolution of the atmospheric response is similar to that obtained with a prescribed SST anomaly, starting as a quasi-linear baroclinic and then quickly evolving into a growing equivalent barotropic one. Because of the heat flux damping, the SST anomaly amplitude slowly decreases, albeit with little change in pattern. Correspondingly, the atmospheric response only increases until it reaches a maximum amplitude after about 1–3.5 months, depending on the SST anomaly considered. The response is similar to that at equilibrium in the fixed SST case, but it is 1.5–2 times smaller, and then slowly decays away.

An investigation into the impact of using various techniques to estimate Arctic surface air temperature anomalies

Time series of global and regional mean Surface Air Temperature (SAT) anomalies are a common metric used to estimate recent climate change. Various techniques can be used to create these time series from meteorological station data. The degree of difference arising from using five different techniques, based on existing temperature anomaly dataset techniques, to estimate Arctic SAT anomalies over land and sea ice were investigated using reanalysis data as a testbed. Techniques which interpolated anomalies were found to result in smaller errors than non-interpolating techniques relative to the reanalysis reference. Kriging techniques provided the smallest errors in estimates of Arctic anomalies and Simple Kriging was often the best kriging method in this study, especially over sea ice. A linear interpolation technique had, on average, Root Mean Square Errors (RMSEs) up to 0.55 K larger than the two kriging techniques tested. Non-interpolating techniques provided the least representative anomaly estimates. Nonetheless, they serve as useful checks for confirming whether estimates from interpolating techniques are reasonable. The interaction of meteorological station coverage with estimation techniques between 1850 and 2011 was simulated using an ensemble dataset comprising repeated individual years (1979-2011). All techniques were found to have larger RMSEs for earlier station coverages. This supports calls for increased data sharing and data rescue, especially in sparsely observed regions such as the Arctic.

The annual-cycle modulation of meridional asymmetry in ENSO’s atmospheric response and its dependence on ENSO zonal structure

Previous studies documented that a distinct southward shift of central-Pacific low-level wind anomalies occurring during the ENSO decaying phase, is caused by an interaction between the Western Pacific annual cycle and El Niño-Southern Oscillation (ENSO) variability. The present study finds that the meridional movement of the central-Pacific wind anomalies appears only during traditional Eastern-Pacific (or EP) El Niño events rather than in Central-Pacific (CP) El Niño events in which sea surface temperature (SST) anomalies are confined to the central Pacific. The zonal structure of ENSO-related SST anomalies therefore has an important effect on meridional asymmetry in the associated atmospheric response and its modulation by the annual cycle. In contrast to EP El Niño events, the SST anomalies of CP El Niño events extend further west towards to the warm pool region with its climatological warm SSTs. In the warm pool region, relatively small SST anomalies thus are able to excite convection anomalies on both sides of the equator, even with a meridionally asymmetric SST background state. Therefore, almost meridionally symmetric precipitation and wind anomalies are observed over the central Pacific during the decaying phase of CP El Niño events. The SST anomaly pattern of La Niña events is similar to CP El Niño events with a reversed sign. Accordingly, no distinct southward displacement of the atmospheric response occurs over the central Pacific during the La Niña decaying phase. These results have important implications for ENSO climate impacts over East Asia, since the anomalous low-level anticyclone over the western North Pacific is an integral part of the annual cycle-modulated ENSO response.

Antarctic ocean and sea ice response to ozone depletion: a two timescale problem

The response of the Southern Ocean to a repeating seasonal cycle of ozone loss is studied in two coupled climate models and found to comprise both fast and slow processes. The fast response is similar to the inter-annual signature of the Southern Annular Mode (SAM) on Sea Surface Temperature (SST), on to which the ozone-hole forcing projects in the summer. It comprises enhanced northward Ekman drift inducing negative summertime SST anomalies around Antarctica, earlier sea ice freeze-up the following winter, and northward expansion of the sea ice edge year-round. The enhanced northward Ekman drift, however, results in upwelling of warm waters from below the mixed layer in the region of seasonal sea ice. With sustained bursts of westerly winds induced by ozone-hole depletion, this warming from below eventually dominates over the cooling from anomalous Ekman drift. The resulting slow-timescale response (years to decades) leads to warming of SSTs around Antarctica and ultimately a reduction in sea-ice cover year-round. This two-timescale behavior - rapid cooling followed by slow but persistent warming - is found in the two coupled models analysed, one with an idealized geometry, the other a complex global climate model with realistic geometry. Processes that control the timescale of the transition from cooling to warming, and their uncertainties are described. Finally we discuss the implications of our results for rationalizing previous studies of the effect of the ozone-hole on SST and sea-ice extent. %Interannual variability in the Southern Annular Mode (SAM) and sea ice covary such that an increase and southward shift in the surface westerlies (a positive phase of the SAM) coincides with a cooling of Sea Surface Temperature (SST) around 70-50$^\circ$S and an expansion of the sea ice cover, as seen in observations and models alike. Yet, in modeling studies, the Southern Ocean warms and sea ice extent decreases in response to sustained, multi-decadal positive SAM-like wind anomalies driven by 20th century ozone depletion. Why does the Southern Ocean appear to have disparate responses to SAM-like variability on interannual and multidecadal timescales? Here it is demonstrated that the response of the Southern Ocean to ozone depletion has a fast and a slow response. The fast response is similar to the interannual variability signature of the SAM. It is dominated by an enhanced northward Ekman drift, which transports heat northward and causes negative SST anomalies in summertime, earlier sea ice freeze-up the following winter, and northward expansion of the sea ice edge year round. The enhanced northward Ekman drift causes a region of Ekman divergence around 70-50$^\circ$S, which results in upwelling of warmer waters from below the mixed layer. With sustained westerly wind enhancement in that latitudinal band, the warming due to the anomalous upwelling of warm waters eventually dominates over the cooling from the anomalous Ekman drift. Hence, the slow response ultimately results in a positive SST anomaly and a reduction in the sea ice cover year round. We demonstrate this behavior in two models: one with an idealized geometry and another, more detailed, global climate model. However, the models disagree on the timescale of transition from the fast (cooling) to the slow (warming) response. Processes that controls this transition and their uncertainties are discussed.

The Sun-Earth connection in time scales from years to decades and centuries

The Sun-Earth connection is studied using long-term measurements from the Sun and from the Earth. The auroral activity is shown to correlate to high accuracy with the smoothed sunspot numbers. Similarly, both geomagnetic activity and global surface temperature anomaly can be linked to cyclic changes in the solar activity. The interlinked variations in the solar magnetic activity and in the solar irradiance cause effects that can be observed both in the Earth's biosphere and in the electromagnetic environment. The long-term data sets suggest that the increase in geomagnetic activity and surface temperatures are related (at least partially) to longer-term solar variations, which probably include an increasing trend superposed with a cyclic behavior with a period of about 90 years.

Friction in mid-latitude cyclones: an Ekman-PV mechanism

The mechanism by which the atmospheric boundary layer reduces the intensity of mid-latitude cyclones is investigated. It is demonstrated that two alternative theories, Ekman pumping and the baroclinic potential vorticity (PV) mechanism, in fact act in union to maximize the spin-down. Ekman pumping aids the ventilation of PV from the boundary layer, and shapes the resulting PV anomaly into one of increased static stability. PV inversion techniques are used to demonstrate how this anomaly reduces the coupling between the upper- and lower-levels within the cyclone, reducing the growth rate.

A novel transport assimilation method for the Atlantic meridional overturning circulation at 26°N

One of the prerequisites for achieving skill in decadal climate prediction is to initialize and predict the circulation in the Atlantic Ocean successfully. The RAPID array measures the Atlantic Meridional Overturning Circulation (MOC) at 26°N. Here we develop a method to include these observations in the Met Office Decadal Prediction System (DePreSys). The proposed method uses covariances of overturning transport anomalies at 26°N with ocean temperature and salinity anomalies throughout the ocean to create the density structure necessary to reproduce the observed transport anomaly. Assimilating transport alone in this way effectively reproduces the observed transport anomalies at 26°N and is better than using basin-wide temperature and salinity observations alone. However, when the transport observations are combined with in situ temperature and salinity observations in the analysis, the transport is not currently reproduced so well. The reasons for this are investigated using pseudo-observations in a twin experiment framework. Sensitivity experiments show that the MOC on monthly time-scales, at least in the HadCM3 model, is modulated by a mechanism where non-local density anomalies appear to be more important for transport variability at 26°N than local density gradients.

Atmospheric response in summer linked to recent Arctic sea ice loss

Since 2007 a large decline in Arctic sea ice has been observed. The large-scale atmospheric circulation response to this decline is investigated in ERA-Interim reanalyses and HadGEM3 climate model experiments. In winter, post-2007 observed circulation anomalies over the Arctic, North Atlantic and Eurasia are small compared to interannual variability. In summer, the post-2007 observed circulation is dominated by an anticyclonic anomaly over Greenland which has a large signal-to-noise ratio. Climate model experiments driven by observed SST and sea ice anomalies are able to capture the summertime pattern of observed circulation anomalies, although the magnitude is a third of that observed. The experiments suggest high SSTs and reduced sea ice in the Labrador Sea lead to positive temperature anomalies in the lower troposphere which weaken the westerlies over North America through thermal wind balance. The experiments also capture cyclonic anomalies over Northwest Europe, which are consistent with downstream Rossby wave propagation

A novel satellite-based ocean monitoring system for Mexico

To analyze patterns in marine productivity, harmful algal blooms, thermal stress in coral reefs, and oceanographic processes, optical and biophysical marine parameters, such as sea surface temperature, and ocean color products, such as chlorophyll-a concentration, diffuse attenuation coefficient, total suspended matter concentration, chlorophyll fluorescence line height, and remote sensing reflectance, are required. In this paper we present a novel automatic Satellite-based Ocean Monitoring System (SATMO) developed to provide, in near real-time, continuous spatial data sets of the above-mentioned variables for marine-coastal ecosystems in the Gulf of Mexico, northeastern Pacific Ocean, and western Caribbean Sea, with 1 km spatial resolution. The products are obtained from Moderate Resolution Imaging Spectroradiometer (MODIS) images received at the Direct Readout Ground Station (located at CONABIO) after each overpass of the Aqua and Terra satellites. In addition, at the end of each week and month the system provides composite images for several ocean products, as well as weekly and monthly anomaly composites for chlorophyll-a concentration and sea surface temperature. These anomaly data are reported for the first time for the study region and represent valuable information for analyzing time series of ocean color data for the study of coastal and marine ecosystems in Mexico, Central America, and the western Caribbean.

Implication of methodological uncertainties for mid-Holocene sea surface temperature reconstructions

We present and examine a multi-sensor global compilation of mid-Holocene (MH) sea surface temperatures (SST), based on Mg/Ca and alkenone palaeothermometry and reconstructions obtained using planktonic foraminifera and organic-walled dinoflagellate cyst census counts. We assess the uncertainties originating from using different methodologies and evaluate the potential of MH SST reconstructions as a benchmark for climate-model simulations. The comparison between different analytical approaches (time frame, baseline climate) shows the choice of time window for the MH has a negligible effect on the reconstructed SST pattern, but the choice of baseline climate affects both the magnitude and spatial pattern of the reconstructed SSTs. Comparison of the SST reconstructions made using different sensors shows significant discrepancies at a regional scale, with uncertainties often exceeding the reconstructed SST anomaly. Apparent patterns in SST may largely be a reflection of the use of different sensors in different regions. Overall, the uncertainties associated with the SST reconstructions are generally larger than the MH anomalies. Thus, the SST data currently available cannot serve as a target for benchmarking model simulations. Further evaluations of potential subsurface and/or seasonal artifacts that may contribute to obscure the MH SST reconstructions are urgently needed to provide reliable benchmarks for model evaluations.