Recreating the South Sea bubble: Lessons from an experiment in financial history

Major bubble episodes are rare events. In this paper, we examine what factors might cause some asset price bubbles to become very large. We recreate, in a laboratory setting, some of the specific institutional features investors in the South Sea Company faced in 1720. Several factors have been proposed as potentially contributing to one of the greatest periods of asset overvaluation in history: an intricate debt-for-equity swap, deferred payment for these shares, and the possibility of default on the deferred payments. We consider which aspect might have had the most impact in creating the South Sea bubble. The results of the experiment suggest that the company?s attempt to exchange its shares for government debt was the single biggest contributor to the stock price explosion, because of the manner in which the swap affected fundamental value. Issuing new shares with only partial payments required, in conjunction with the debt-equity swap, also had a significant effect on the size of the bubble. Limited contract enforcement, on the other hand, does not appear to have contributed significantly.

Is accountability a double-edged sword? Experimental evidence on the effectiveness of internal controls to prevent fraud

Recent legislations oblige organizations to monitor the effectiveness of internal control mechanisms that are necessary to prevent fraud. However, little is known about the effectiveness of different internal controls. We investigate whether the duty to sign work results-one of the most prominent internal control mechanisms-is effective to prevent fraud under different superior instructions. We use a 2×2 between-subjects experimental design with accountability (duty to sign work results vs. no duty to sign) and superior instructions (with vs. without profit maximization cue) as independent variables. Both manipulations of superior instructions reminded people to respect accounting standards and principles but in one condition, an instruction to increase revenues was integrated as profit maximization cue. We expected this cue to trigger a profit maximization decision frame that increases the likelihood for fraudulent revenue recording. 58 managers from an executive MBA class participated in the experiment. We find that superior instructions interact with accountability. Fraudulent revenue recording was particularly observed when people received instructions to increase revenues and had to sign their work results. Consequently, fraudulent behavior can occur without pressure to commit fraud due to profit maximization cues that are communicated by a superior and despite implemented internal control mechanisms. We discuss possible implications of our results for the prevention of fraudulent behavior.

Islas Lobos de Afuera: Evaluación de pulpo Octopus mimus Gould, 1852 y percebes Pollicipes elegans (Lesson, 1831), Lambayeque, 2010

La distribución de tallas de pulpo fluctuó entre 40 y 200 mm de longitud del manto. El peso promedio fue 588,20 g, el 85% de los ejemplares no superó el peso mínimo de extracción (1 kg). En hembras predominaron estadios en desarrollo (63%), madurez total (16%); en machos predominaron estadios en desove (64%) y maduros (28%). La mayor concentración del recurso se registró al norte de la isla El Ladrón y frente a isla Quita Calcal. Las tallas de percebes fluctuaron entre 1 y 40 mm de longitud carina-rostral (Lcr), 55% de ejemplares estuvieron maduros. El percebes estuvo distribuido en el intermareal rocoso entre 6°56’9’’S y 6°57’30,6’’S en un área de 887,50 m2. La biomasa se estimó en 3,06 t ±27,18% y la población en 0,42 millones de individuos ±47,30%; el stock de juveniles (<17 mm) fue 0,17 millones de ejemplares; el stock adulto (≥17 mm) estuvo constituido por 0,24 millones de individuos y 2,90 t de la biomasa.

The contribution of the young Cretaceous Caribbean Oceanic Plateau to the genesis of late Cretaceous arc magmatism in the Cordillera Occidental of Ecuador

The eastern part of the Cordillera Occidental of Ecuador comprises thick buoyant oceanic plateaus associated with island-arc tholeiites and subduction-related calc-alkaline series, accreted to the Ecuadorian Continental Margin from Late Cretaceous to Eocene times. One of these plateau sequences, the Guaranda Oceanic Plateau is considered as remnant of the Caribbean-Colombian Oceanic Province (CCOP) accreted to the Ecuadorian Margin in the Maastrichtien. Samples studied in this paper were taken from four cross-sections through two arc-sequences in the northern part of the Cordillera Occidental of Ecuador, dated as (Rio Cala) or ascribed to (Macuchi) the Late Cretaceous and one arc-like sequence in the Chogon-Colonche Cordillera (Las Orquideas). These three island-arcs can clearly be identified and rest conformably on the CCOP. In all four localities, basalts with abundant large clinopyroxene phenocrysts can be found, mimicking a picritic or ankaramitic facies. This mineralogical particularity, although not uncommon in island arc lavas, hints at a contribution of the CCOP in the genesis of these island arc rocks. The complete petrological and geochemical study of these rocks reveals that some have a primitive island-arc nature (MgO values range from 6 to 11 wt.%). Studied samples display marked Nb, Ta and Ti negative anomalies relative to the adjacent elements in the spidergrams characteristic of subductionrelated magmatism. These rocks are LREE-enriched and their clinopyroxenes show a tholeiitic affinity (FeO(1)-TiO(2) enrichment and CaO depletion from core to rim within a single crystal). The four sampled cross-sections through the island-arc sequences display homogeneous initial Nd, and Pb isotope ratios that suggest a unique mantellic source for these rocks resulting from the mixing of three components: an East-Pacific MORB end-member, an enriched pelagic sediment component, and a HIMU component carried by the CCOP. Indeed, the ankaramite and Mg-basalt sequences that form part of the Caribbean-Colombian Oceanic Plateau are radiogenically enriched in (206)Pb/(204)Pb and (207)Pb/(204)Pb and contain a HIMU component similar to that observed in the Gorgona basalts and Galapagos lavas. The subduction zone that generated the Late Cretaceous arcs occurred far from the continental margin, in an oceanic environment. This implies that no terrigenous detrital sediments interacted with the source at this period. Thus, the enriched component can only result from the melting of subducted pelagic sediments. We have thus defined the East-Pacific MORB, enriched (cherts, pelagic sediments) and HIMU components in an attempt to constrain and model the genesis of the studied island-arc magmatism, using a compilation of carefully selected isotopic data from literature according to rock age and paleogeographic location at the time of arc edification. Tripolar mixing models reveal that proportions of 12-15 wt.% of the HIMU component, 7-15 wt.% of the pelagic sediment end-member and 70-75 wt.% of an East-pacific MORB end-member are needed to explain the measured isotope ratios. These surprisingly high proportions of the HIMU/CCOP component could be explained by the young age of the oceanic plateau (5-15 Ma) during the Late Cretaceous arc emplacement. The CCOP, basement of these arc sequences, was probably still hot and easily assimilated at the island-arc lava source. (C) 2008 Elsevier Ltd. All rights reserved,

Nutrient leaching potential following application of papermill lime-sludge to an acidic clay soil

This experiment was carried out under greenhouse conditions with soil pots during 210 days, to evaluate the effect of calcitic papermill lime-sludge application (at the rates 0, 773, 1.547, and 2.320 mg kg-1 or respective equivalents to control, 2, 4, and 6 t ha-1), on chemical composition of soil leachate and its effects on eucalypt growth and yield. Highest soil leachate pH, SO4, and Na concentrations occurred in the 4 and 6 t ha-1 treatments. Soil leachate nitrate concentrations decreased with increasing lime-sludge rate. Soil leachate phosphate remained low (below the detection limit) in all treatments until 120 days, while the concentration increased in the lime-sludge treatments at 210 days (last sampling) in about 600 mg L-1. Lime-sludge decreased leachate Mg concentration, but had no significant effect among rates. Soil leachate Ca, K, B, Cu, Fe, and Zn did not change significantly for any lime-sludge application rates. The maximum NO3, Ca, Mg, K, and Na concentrations in the soil leachate occurred at 60 days after lime-sludge application (leaching equivalent to 1 pore volume), but for pH and SO4, the maximum occurred at 210 days (leaching equivalent to 4 pore volumes). Lime-sludge application decreased the concentration of exchangeable Al in the soil. Plant diameter growth and dry matter yield were increased with increasing lime-sludge rate. Beneficial effects on mineral nutrition (P, K, Ca, B, and Zn) of eucalypts were also obtained by the application of 4 and 6 t ha-1 of lime-sludge.

Reconsolidation of the soil surface after tillage discontinuity, with and without cultivation, related to erosion and its prediction with RUSLE

Site-specific regression coefficient values are essential for erosion prediction with empirical models. With the objective to investigate the surface-soilconsolidation factor, Cf, linked to the RUSLE's prior-land-use subfactor, PLU, an erosion experiment using simulated rainfall on a 0.075 m m-1 slope, sandy loam Paleudult soil, was conducted at the Agriculture Experimental Station of the Federal University of Rio Grande do Sul (EEA/UFRGS), in Eldorado do Sul, State of Rio Grande do Sul, Brazil. Firstly, a row-cropped area was excluded from cultivation (March 1995), the existing crop residue removed from the field, and the soil kept clean-tilled the rest of the year (to get a degraded soil condition for the intended purpose of this research). The soil was then conventional-tilled for the last time (except for a standard plot which was kept continuously cleantilled for comparison purposes), in January 1996, and the following treatments were established and evaluated for soil reconsolidation and soil erosion until May 1998, on duplicated 3.5 x 11.0 m erosion plots: (a) fresh-tilled soil, continuously in clean-tilled fallow (unit plot); (b) reconsolidating soil without cultivation; and (c) reconsolidating soil with cultivation (a crop sequence of three corn- and two black oats cycles, continuously in no-till, removing the crop residues after each harvest for rainfall application and redistributing them on the site after that). Simulated rainfall was applied with a Swanson's type, rotating-boom rainfall simulator, at 63.5 mm h-1 intensity and 90 min duration, six times during the two-and-half years of experimental period (at the beginning of the study and after each crop harvest, with the soil in the unit plot being retilled before each rainfall test). The soil-surface-consolidation factor, Cf, was calculated by dividing soil loss values from the reconsolidating soil treatments by the average value from the fresh-tilled soil treatment (unit plot). Non-linear regression was used to fit the Cf = e b.t model through the calculated Cf-data, where t is time in days since last tillage. Values for b were -0.0020 for the reconsolidating soil without cultivation and -0.0031 for the one with cultivation, yielding Cf-values equal to 0.16 and 0.06, respectively, after two-and-half years of tillage discontinuation, compared to 1.0 for fresh-tilled soil. These estimated Cf-values correspond, respectively, to soil loss reductions of 84 and 94 %, in relation to soil loss from the fresh-tilled soil, showing that the soil surface reconsolidated intenser with cultivation than without it. Two distinct treatmentinherent soil surface conditions probably influenced the rapid decay-rate of Cf values in this study, but, as a matter of a fact, they were part of the real environmental field conditions. Cf-factor curves presented in this paper are therefore useful for predicting erosion with RUSLE, but their application is restricted to situations where both soil type and particular soil surface condition are similar to the ones investigate in this study.

State-space approach to evaluate the relation between soil physical and chemical properties

The state-space approach is used to evaluate the relation between soil physical and chemical properties in an area cultivated with sugarcane. The experiment was carried out on a Rhodic Kandiudalf in Piracicaba, State of São Paulo, Brazil. Sugarcane was planted on an area of 0.21 ha i.e., in 15 rows 100 m long, spaced 1.4 m. Soil water content, soil organic matter, clay content and aggregate stability were sampled along a transect of 84 points, meter by meter. The state-space approach is used to evaluate how the soil water content is affected by itself and by soil organic matter, clay content, and aggregate stability of neighboring locations, in different combinations, aiming to contribute to a better understanding of the relation among these variables in the soil. Results show that soil water contents were successfully estimated by this approach. Best performances were found when the estimate of soil water content at locations i was related to soil water content, clay content and aggregate stability at locations i-1. Results also indicate that this state-space model using all series describes the soil water content better than any equivalent multiple regression equation.

Peach palm growth and heart-of-palm yield responses to liming

The effects of liming rates on growth and heart-of-palm yield of peach palm plants (Bactris gasipaes Kunth) were studied in a two-year field experiment conducted in Pariquera-Açu, State of Sao Paulo, Brazil. Soils in this region are allic (sub group Ultic Haplorthox), with base saturation ranging from 15 to 26 % of the cation exchange capacity (CEC). A randomized complete block design, with five rates of dolomitic limestone (0, 0.7, 4.7, 8.7, and 14.6 Mg ha-1) and five replications was utilized. Individual plots were composed of 80 plants but only the inner rows (24 plants) were used for data recording. Planting spacing was 2 x 1 m. There was a cubic effect of liming rates on growth and yield. Maximum heart-of-palm yield was estimated to be achieved at 4.3 Mg ha-1 of limestone application, corresponding to 51.4 % soil base saturation. A significant decrease in growth and yield was observed when large amounts of limestone were applied (8.7 and 14.6 Mg ha-1), probably due to a decreased micronutrient availability.

A selective nociceptive block is not sufficient to prevent central changes after peripheral nerve injury

Background: Providing analgesia without suppressing motor or sensory function is a challenge for regional anesthesia and postoperative pain management. Resiniferatoxin (RTX), an ultrapotent agonist for transient receptor potential subtype-1 (TRPV1) can produce this selective blockade, as TRPV1 is selectively expressed on nociceptors. Futhermore, after peripheral nerve injury, spontaneous ectopic activity arises from all types of nerve fibers that can affect spinal neurons and glial cells. The goal of the present experiment is to determine whether spontaneous activity generated in C-fibers or in both A&C-fibers is required for microglia activation. Method: We applied RTX (0.01%) or bupivacaine microspheres to the sciatic nerve of rats to block the conduction of C-fibers or A&C-fibers, respectively, before spared nerve injury (SNI). Behavior was tested and all the rats were sacrificed 2 days later; immunohistochemistry was performed on their spinal cord for mitogen-activated protein kinase (MAPK) p38, bromodeoxyuridine (BrdU, marker of proliferation) and Iba1 (microglial marker). Result: At day 2 after SNI robust mechanical allodynia and p38 activation in spinal microglia were documented. There was also a substantial cell proliferation in the spinal cord, all proliferating cells (BrdU+) being microglia (Iba1+). RTX blocked heat sensitivity and produced heat hypoalgesia without affecting mechanical allodynia and motor function. Microglial proliferation and p38 activation in the spinal cord were not affected by RTX (p >0.05). In contrast, a complete sensory and motor blockade was seen with bupivacaine which also significantly inhibited p38 activation and microglial proliferation in the spinal cord (p <0.05). Conclusion: We conclude that (1) RTX can provide a selective nociceptive blockade but that (2) blocking only nociceptive fibers does not impair the development of mechanical allodynia and microglia activation. Therefore (3) if microglia activation is important for chronic pain development then specific nociceptive blockade won't be sufficient to prevent it.

Atrial natriuretic peptide administered as intravenous infusion or bolus injection to patients with liver cirrhosis and ascites.

The effect of a synthetic atrial natriuretic peptide (h-ANP, 25 amino acids, Wy-47.663) on blood pressure, renal electrolyte excretion, plasma catecholamines, and plasma renin activity was studied in nine patients with cirrhosis of the liver and ascites. The peptide was infused intravenously at 24-h intervals for 2 h in groups of four patients each in two different doses (0.015 and 0.075 micrograms/kg/min or 0.06 and 0.3 micrograms/kg/min). A control experiment with the vehicle was performed in all patients. In three patients h-ANP (1 and 2 micrograms/kg i.v.) was administered as an intravenous bolus injection. Consistent falls in blood pressure were observed during h-ANP infusion only with the two higher doses. The two lower infused doses induced a consistent natriuresis; this renal response was abolished when the two larger doses were used. When given as a bolus, h-ANP had a natriuretic effect comparable to that of the two lower doses of infused h-ANP. Plasma catecholamines and plasma renin activity increased during infusion of the two higher doses of h-ANP. It thus appears that in patients with cirrhosis and ascites, the natriuretic effect of infused h-ANP decreases rather than increases when the doses are raised. Bolus administration of h-ANP may be less prone to trigger counterbalancing responses and side-effects.

Atrial assist device, a new alternative to lifelong anticoagulation?

OBJECTIVE: Atrial fibrillation is a very common heart arrhythmia, associated with a five-fold increase in the risk of embolic strokes. Treatment strategies encompass palliative drugs or surgical procedures all of which can restore sinus rhythm. Unfortunately, atria often fail to recover their mechanical function and patients therefore require lifelong anticoagulation therapy. A motorless volume displacing device (Atripump) based on artificial muscle technology, positioned on the external surface of atrium could avoid the need of oral anticoagulation and its haemorrhagic complications. An animal study was conducted in order to assess the haemodynamic effects that such a pump could provide. METHODS: Atripump is a dome-shape siliconecoated nitinol actuator sewn on the external surface of the atrium. It is driven by a pacemaker-like control unit. Five non-anticoagulated sheep were selected for this experiment. The right atrium was surgically exposed, the device sutured and connected. Haemodynamic parameters and intracardiac ultrasound (ICUS) data were recorded in each animal and under three conditions; baseline; atrial fibrillation (AF); atripump assisted AF (aaAF). RESULTS: In two animals, after 20 min of AF, small thrombi appeared in the right atrial appendix and were washed out once the pump was turned on. Assistance also enhanced atrial ejection fraction. 31% baseline; 5% during AF; 20% under aaAF. Right atrial systolic surfaces (cm2) were; 5.2 +/- 0.3 baseline; 6.2 +/- 0.1 AF; 5.4 +/- 0.3 aaAF. CONCLUSION: This compact and reliable pump seems to restore the atrial "kick" and prevents embolic events. It could avoid long-term anticoagulation therapy and open new hopes in the care of end-stage heart failure.

Maize response to nitrogen fertilization timing in two tillage systems in a soil with high organic matter content

No-tillage systems, associated to black oat as preceding cover crop, have been increasingly adopted. This has motivated anticipated maize nitrogen fertilization, transferring it from the side-dress system at the stage when plants have five to six expanded leaves to when the preceding cover crop is eliminated or to maize sowing. This study was conducted to evaluate the effects of soil tillage system and timing of N fertilization on maize grain yield and agronomic efficiency of N applied to a soil with high organic matter content. A three-year field experiment was conducted in Lages, state of Santa Catarina, from 1999 onwards. Treatments were set up in a split plot arrangement. Two soil tillage systems were tested in the main plots: conventional tillage (CT) and no-tillage (NT). Six N management systems were assessed in the split-plots: S1 - control, without N application; S2 - all N (100 kg ha-1) applied at oat desiccation; S3 - all N applied at maize sowing; S4 - all N side-dressed when maize had five expanded leaves (V5 growth stage); S5 - 1/3 of N rate applied at maize sowing and 2/3 at V5; S6 - 2/3 of nitrogen rate applied at maize sowing and 1/3 at V5. Maize response to the time and form of splitting N was not affected by the soil tillage system. Grain yield ranged from 6.0 to 11.8 t ha-1. The anticipation of N application (S2 and S3) decreased grain yield in two of three years. In the rainiest early spring season (2000/2001) of the experiment, S4 promoted an yield advantage of 2.2 t ha-1 over S2 and S3. Application of total N rate before or at sowing decreased the number of kernels produced per ear in 2000/2001 and 2001/2002 and the number of ears produced per area in 2001/2002, resulting in reduced grain yield. The agronomic efficiency of applied N (kg grain increase/kg of N applied) ranged from 13.9 to 38.8 and was always higher in the S4 than in the S2 and S3 N systems. Short-term N immobilization did not reduce grain yield when no N was applied before or at maize sowing in a soil with high organic matter content, regardless of the soil tillage system.

Root system distribution of sugar cane as related to nitrogen fertilization, evaluated by two methods: monolith and probes

Few studies on sugar cane have evaluated the root system of the crop, in spite of its importance. This is mainly due to the difficulty of evaluation and high variability of results. The objective of this study was to develop an evaluation method of the cane root system by means of probes so as to evaluate the mass, distribution and metabolically active roots related to N fertilization at planting. For this purpose, an experiment was conducted in an Arenic Kandiustults with medium texture in Jaboticabal/SP, in a randomized block design with four replications and four treatments: control (without N) and 40, 80 and 120 kg ha-1 of N applied in the form of urea in the planting furrow of the cane variety SP81 3250. One week before harvest, a urea-15N solution was applied at the cane stalk base to detect active metabolism in the root system. Trenches of 1.5 m length and 0.6 m depth were opened between two sugar cane rows for root sampling by two methods: monoliths (0.3, 0.2 and 0.15 m wide, deep and long respectively) taken from the trench wall and by probe (internal diameter 0.055 m). For each method, 15 samples per plot were collected. The roots were separated from the soil in a sieve (2 mm mesh), oven-dried (at 65 ºC) and the dry matter was measured. Root sampling by probes resulted in root mass that did not differ from the evaluation in monoliths, indicating that this evaluation method may be used for sugar cane root mass, although neither the root distribution in the soil profile nor the rhizome mass were efficiently evaluated, due to the small sample volume. Nitrogen fertilization at planting did not result in a greater root accumulation in the sugar cane plant, but caused changes in the distribution of the root system in the soil. The absence of N fertilization led to a better root distribution in the soil profile, with 50, 34 and 16 % in the 0-0.2, 0.2-0.4 and 0.4-0.6 m layers, respectively; in the fertilized treatments the roots were concentrated in the surface layer, with on average 70, 17 and 13 % for the same layers. The metabolically active roots were concentrated in the center of the cane stool, amounting to 40 % of the total root mass, regardless of N fertilization (application of 120 kg ha-1 N or without N).

Phosphorus and root distribution and corn growth as related to long-term tillage systems and fertilizer placement

Soil and fertilizer management during cultivation can affect crop productivity and profitability. Long-term experiments are therefore necessary to determine the dynamics of nutrient and root distribution as related to soil profile, as well as the effects on nutrient uptake and crop growth. An 18-year experiment was conducted at the Federal University of Rio Grande do Sul State (UFRGS), in Eldorado do Sul, Brazil, on Rhodic Paleudult soil. Black oat and vetch were planted in the winter and corn in the summer. The soil management methods were conventional, involving no-tillage and strip tillage techniques and broadcast, row-and strip-applied fertilizer placement (triple superphosphate). Available P (Mehlich-1) and root distribution were determined in soil monoliths during the corn grain filling period. Corn shoot dry matter production and P accumulation during the 2006/2007 growing season were determined and the efficiency of P utilization calculated. Regardless of the degree of soil mobilization, P and roots were accumulated in the fertilized zone with time, mainly in the surface layer (0-10 cm). Root distribution followed P distribution for all tillage systems and fertilizer treatments. Under no-tillage, independent of the fertilizer placement, the corn plants developed more roots than in the other tillage systems. Although soil tillage systems and fertilizer treatments affected P and root distribution throughout the soil profile, as well as P absorption and corn growth, the efficiency of P utilization was not affected.

Response of irrigated wheat cultivars to different nitrogen rates and sources

High wheat yields require good N fertilization management. The objective of this study was to evaluate the effects of different N applications at sowing using Entec (N source with nitrification inhibitor) and urea (traditional N source) at covering, on four wheat cultivars. The experiment was conducted in a randomized block design in a factorial scheme, with four replications, at the Experimental Station of the Faculdade de Engenharia de Ilha Solteira - UNESP, on a dystrophic, epi-eutrophic alic Red Latosol with loamy texture, formerly under savannah vegetation. Four N rates (0, 60, 120, and 180 kg ha-1) were tested, applied at sowing in the case of Entec and top-dressed 40 days after plant emergence in the case of urea, and the four wheat cultivars E 21, E 22, E 42, and IAC 370. The yield of the wheat cultivars E 21 and E 42 was highest. Plant height and lodging index of cultivar E 22 were greatest, with consequently lowest grain yield. There was no significant difference between Entec (applied at sowing) and urea (top-dressed) in terms of grain yield and yield components. Nevertheless, urea resulted in a higher N leaf content, and Entec in a larger number of undeveloped spikelets. High nitrogen rates influenced the hectoliter mass negatively, affecting wheat grain quality. Grain yield increased under N rates of up to 82 kg ha-1 N, through Entec applied at sowing or top-dressed urea.