Competition and unitization in oil extraction : a tale of two tragedies

This paper compares two organizational modes for extracting oil from a common pool: unitization and competitive extraction. The analysis suggests that the general presumption that unitization is surplus enhancing relative to competitive extraction may not always be valid due to contractual incompleteness associated with unitization contracts. While competitive extraction suffers from the tragedy of the commons, unitization can be subject to the dual tragedy of the anticommons. This provides an explanation for the puzzle confronting the oil industry that firms are often reluctant to voluntarily enter unitization agreements.

Multifractality and long-range dependence of asset returns: the scaling behavior of the Markov-switching multifractal model with lognormal volatility components

In this paper, we consider daily financial data from various sources (stock market indices, foreign exchange rates and bonds) and analyze their multiscaling properties by estimating the parameters of a Markov-switching multifractal (MSM) model with Lognormal volatility components. In order to see how well estimated models capture the temporal dependency of the empirical data, we estimate and compare (generalized) Hurst exponents for both empirical data and simulated MSM models. In general, the Lognormal MSM models generate "apparent" long memory in good agreement with empirical scaling provided that one uses sufficiently many volatility components. In comparison with a Binomial MSM specification [11], results are almost identical. This suggests that a parsimonious discrete specification is flexible enough and the gain from adopting the continuous Lognormal distribution is very limited.

Do retail option traders know better about market volatility?

This paper examines the informational content and predictive power of implied volatility over different forecasting horizons in a sample of European covered warrants traded in the Hong Kong and Singapore markets. The empirical results show that time-series-based volatility forecasts outperform implied volatility forecast as predictors of future volatility. The finding also suggests that implied volatility is biased and informationally inefficient and that covered warrants are typically overvalued. The results are attributable to the fact that, in Hong Kong and Singapore, the covered warrants markets are dominated by retail investors who tend to use covered warrants' leverage to speculate on the price movements of the underlying assets rather than to express their view on volatility. Arbitrage is not possible in the markets as short-selling of covered warrants is prohibited.

Transesterification of fish oil to produce fatty acid ethyl esters using ultrasonic energy

This study evaluated the production of fatty acid ethyl esters from fish oil using ultrasonic energy and alkaline catalysts dissolved in ethanol. The feasibility of fatty acid ethyl ester production was determined using an ultrasonic bath and probe, and between 0.5 and 1% KOH (added to the fish oil). Furthermore, factors such as ultrasonic device (bath and probe), catalyst (KOH and C2H5ONa), temperature (20 and 60 °C), and duration of exposure (10–90 min) were assessed. Sodium ethoxide was found to be a more efficient catalyst than KOH when transesterifying fish oil. Ultrasonic energy applied for greater than 30 min at 60 °C using 0.8% of C2H5ONa as a catalyst transesterified over 98% fish oil triglycerides to fatty acid ethyl esters. It is reasonable to conclude that the yield of fatty acid ethyl esters produced by applying ultrasonic energy to fish oil is related to the sonication time. Due to increases in the surface area contact between the reactants and the catalyst, ultrasonic energy has the potential to reduce the production time required by a conventional large-scale commercial transesterification method that uses agitation as a way of mixing.

The forecast quality of CBOE implied volatility indexes

We examine the forecast quality of Chicago Board Options Exchange (CBOE) implied volatility indexes based on the Nasdaq 100 and Standard and Poor's 100 and 500 stock indexes. We find that the forecast quality of CBOE implied volatilities for the S&P 100 (VXO) and S&P 500 (VIX) has improved since 1995. Implied volatilities for the Nasdaq 100 (VXN) appear to provide even higher quality forecasts of future volatility. We further find that attenuation biases induced by the econometric problem of errors in variables appear to have largely disappeared from CBOE volatility index data since 1995.

Forecasting stock index volatility : comparing implied volatility and the intraday high-low price range

The intraday high–low price range offers volatility forecasts similarly efficient to high-quality implied volatility indexes published by the Chicago Board Options Exchange (CBOE) for four stock market indexes: S&P 500, S&P 100, NASDAQ 100, and Dow Jones Industrials. Examination of in-sample and out-of-sample volatility forecasts reveals that neither implied volatility nor intraday high–low range volatility consistently outperforms the other.

Estimating expected excess returns using historical and option-implied volatility

We test the relation between expected and realized excess returns for the S&P 500 index from January 1994 through December 2003 using the proportional reward-to-risk measure to estimate expected returns. When risk is measured by historical volatility, we find no relation between expected and realized excess returns. In contrast, when risk is measured by option-implied volatility, we find a positive and significant relation between expected and realized excess returns in the 1994–1998 subperiod. In the 1999–2003 subperiod, the option-implied volatility risk measure yields a positive, but statistically insignificant, risk-return relation. We attribute this performance difference to the fact that, in the 1994–1998 subperiod, return volatility was lower and the average return was much higher than in the 1999–2003 subperiod, thereby increasing the signal-to-noise ratio in the latter subperiod.

Bioequivalence of encapsulated and microencapsulated fish-oil supplementation

Omega-3 oil from fish can be stabilised against oxidation using a variety of microencapsulation technologies. Complex coacervation has been used and found to be commercially useful for fortifying foods and beverages with long-chain omega-3 containing oils. Here we report a comparative human bioavailability study of microencapsulated omega-3 fish oil and standard fish-oil soft-gel capsules. Phospholipid levels of long-chain omega-3 fatty acids increased equivalently in both subjects groups. Also, triacylglycerol levels were reduced similarly in both groups. These results indicate that omega-3 fatty acids have equivalent bioavailability when delivered as microencapsulated complex coacervates or as soft-gel capsules.

Fish oil replacement in finfish nutrition

Unsustainable fishing practices have placed a heavy emphasis on aquaculture to meet the global shortfalls in the supply of fish and seafood, which are commonly accepted as the primary source of health-promoting essential omega-3 (n-3 highly unsaturated fatty acids). However, dietary fish oil is required for the production of omega-3-rich farmed fish and this commodity, in a vicious circle, is at present derived solely from wild fisheries. Decreasing global availability coupled with the highly variable price of this resource has forced the aquaculture industry to investigate the possibilities of alternative dietary lipid sources. This review attempts to compile all principal information available regarding the effects of fish oil replacement for the diets of farmed finfish, analysing the findings using a comparative approach among different cultured fish species. The review initially focuses on the present situation with regard to the production, availability and main nutritional characteristics of fish oil and the principal alternative lipid sources (such as vegetable oils and animal fats). Following this, the effects of fish oil replacement in finfish nutrition on feed quality, fish performance, feed efficiency, fish lipid metabolism, final eating quality and related economic aspects are presented and discussed.

Realized volatility and correlation in grain futures markets: testing for spillover effects

Fluctuations in commodity prices are a major concern to many market participants. This paper uses realized volatility methods to calculate daily volatility and correlation estimates for three grain futures prices (corn, soybean, and wheat). The realized volatility estimates exhibit properties consistent with the stylized facts observed in earlier studies. According to daily realized correlations and regression coefficients, the spot returns from the three grain futures are positively related. The realized estimates are then used to evaluate the degree of volatility transmission across grain futures prices. The impulse response analysis is conducted by fitting the vector autoregressive model to realized volatility and correlation estimates, using the bootstrap method for statistical inference. The results indicate that rich dynamic interactions exist among the volatilities and correlations across the grain futures markets.

Effects of alternate phases of fish oil and vegetable oil-based diets in Murray cod

Fish oil (FO)- and canola oil (CO)-based diets were regularly alternated in a daily cycle (amCO: alternation of CO in the morning and FO in the afternoon, and pmCO: alternation of FO in the morning and CO in the afternoon) or in a series of weekly cycles (2W: alternation of 2 weeks on CO and 2 weeks on FO, 4W: alternation of 4 weeks on CO and 4 weeks on FO), over a 16-week period in juvenile Murray cod (Maccullochella peelii peelii). No significant differences were observed between any of the treatments in relation to the final weight. However, fish subjected to the 2W schedule were larger (P>0.05) than all other treatments (37.2 ± 0.30 vs. 34.3 ± 0.58 in the control treatment). Fish receiving the 2W treatment had a significantly lower total net disappearance of eicosapentaenoic acid 20:5n-3 (EPA) and docosahexaenoic acid 22:6n-3 (62.1% and 24.0% respectively) compared with the control treatment (fish continuously fed a blend of 50% FO and 50% CO). Likewise, Murray cod receiving the amCO daily schedule had a significantly lower total net disappearance of EPA in comparison with the CD and pmCO treatments. These data point towards the existence of cyclical mechanisms relative to fatty acid utilization/retention.

Fatty acid metabolism (desaturation, elongation and β-oxidation) in rainbow trout fed fish oil- or linseed oil-based diets

In consideration of economical and environmental concerns, fish oil (FO) substitution in aquaculture is the focus of many fish nutritionists. The most stringent drawback of FO replacement in aquafeeds is the consequential modification to the final fatty acid (FA) make-up of the fish fillet.However, it is envisaged that a solution may be achieved through a better understanding of fish FA metabolism. Therefore, the present study investigated the fate of individual dietary FA in rainbow trout (Oncorhynchus mykiss) fed a FO-based diet (rich in 20 : 5n-3) or a linseed oil-based diet (LO; rich in 18 : 3n-3). The study demonstrated that much of the 18 : 3n-3 content from the LO diet was oxidised and, despite the significantly increased accretion of D-6 and D-5 desaturated FA, a 2- and 3-fold reduction in the fish body content of 20 : 5n-3 and 22 : 6n-3, respectively, compared with the FO-fed fish, was recorded. The accretion of longer-chain FA was unaffected by the dietary treatments, while there was a greater net disappearance of FA provided in dietary surplus. SFA and MUFA recorded a net accretion of FA produced ex novo. In the fish fed the FO diet, the majority of dietary 20 : 5n-3 was accumulated (53·8 %), some was oxidised (14·7 %) and a large proportion (31·6 %) was elongated and desaturated up to 22 : 6n-3. In the fish fed the LO diet, the majority of dietary 18 : 3n-3 was accumulated (58·1 %), a large proportion was oxidised (29·5 %) and a limited amount (12·4 %) was bio-converted to longer and more unsaturated homologues.

Influence of heat on biological activity and concentration of oleocanthal : a natural anti-inflammatory agent in virgin olive oil

The olive oil phenolic oleocanthal is a natural nonsteroidal anti-inflammatory compound that irritates the oral pharynx in a dose-dependent manner. It has been proposed that the biological activity of oleocanthal is partially responsible for the beneficial health effects of the Mediterranean diet. Virgin
olive oil containing oleocanthal is often added as an ingredient in a number of cooked dishes, and therefore it is of great importance to understand how best to preserve the putative health-promoting benefits of this compound, as olive oil phenolics are subject to degradation upon heating in general. One extra virgin olive oil containing 53.9 mg/kg oleocanthal was heated at various temperatures (100, 170, and 240 °C) for set time periods (0, 1, 5, 20, 60, and 90 min). Oleocanthal concentrations were quantified using HPLC, and its biological activity was determined with a taste bioassay measuring the intensity of throat irritation. Results demonstrated that oleocanthal was heat stable compared with other olive oil phenolics, with a maximum loss of 16% as determined by HPLC analysis. However, there was a significant decrease of up to 31% (p < 0.05) in the biological activity of oleocanthal as determined by the taste bioassay. Although there was minimal degradation of leocanthal concentration, there was a significant decrease in the biological activity of oleocanthal upon extended heating time, indicating a possible loss of the putative health -benefiting properties of oleocanthal. Alternatively, the difference in the concentration and biological activity of oleocanthal after heat treatment could be a result of an oleocanthal antagonist forming, decreasing or masking the biological activity of oleocanthal.

Short-term food deprivation does not improve the efficacy of a fish oil finishing strategy in Murray cod

Two groups of fish (Maccullochella peelii peelii) were fed for a 90-day conditioning period on a canola oil diet (CO) or a fish oil diet (FO). Canola oil diet fed fish were then shifted to the FO diet for a 90-day finishing period. A variable period of  starvation (0, 5, 10 and 15 days) was introduced to reduce the initial lipid level of CO fed fish at the beginning of the finishing period and therefore accelerate the rate of recovery of FO-like fatty acids. During starvation, fish did not show  significant reduction in total lipid content, either in the fillet or whole body. At the end of the conditioning period, fatty acid composition of the diet was mirrored in fish tissues. These differences came close to levelling out following re-feeding, with the exception of n - 6 polyunsaturated fatty acids (PUFA). However, no  effects of the starvation periods on the final fatty acid make-up of fish were recorded. The results of this trial show that Murray cod, when subjected to a starvation period of up to 15 days, does not lose an appreciable quantity of lipid and, therefore, the tested starvation approach to reduce the initial level of lipid has to be considered unsuccessful.