Annuities and Individual Welfare

This paper advances the theory of annuity demand. First, we derive sufficient conditions under which complete annuitization is optimal, showing that this well-known result holds true in a more general setting than in Yaari (1965). Specifically, when markets are complete, sufficient conditions need not impose exponential discounting, intertemporal separability or the expected utility axioms; nor need annuities be actuarially fair, nor longevity risk be the only source of consumption uncertainty. All that is required is that consumers have no bequest motive and that annuities pay a rate of return for survivors greater than those of otherwise matching conventional assets, net of administrative costs. Second, we show that full annuitization may not be optimal when markets are incomplete. Some annuitization is optimal as long as conventional asset markets are complete. The incompleteness of markets can lead to zero annuitization but the conditions on both annuity and bond markets are stringent. Third, we extend the simulation literature that calculates the utility gains from annuitization by considering consumers whose utility depends both on present consumption and a which they have become accustomed. The value of annuitization hinges critically on the size of the initial standard-of-living relative to wealth.

Factors influencing in vivo transduction by recombinant adeno-associated viral vectors expressing the human factor IX cDNA.

Long-term expression of coagulation factor IX (FIX) has been observed in murine and canine models following administration of recombinant adeno-associated viral (rAAV) vectors into either the portal vein or muscle. These studies were designed to evaluate factors that influence rAAV-mediated FIX expression. Stable and persistent human FIX (hFIX) expression (> 22 weeks) was observed from 4 vectors after injection into the portal circulation of immunodeficient mice. The level of expression was dependent on promoter with the highest expression, 10% of physiologic levels, observed with a vector containing the cytomegalovirus (CMV) enhancer/beta-actin promoter complex (CAGG). The kinetics of expression after injection of vector particles into muscle, tail vein, or portal vein were similar with hFIX detectable at 2 weeks and reaching a plateau by 8 weeks. For a given dose, intraportal administration of rAAV CAGG-FIX resulted in a 1.5-fold or 4-fold higher level of hFIX compared to tail vein or intramuscular injections, respectively. Polymerase chain reaction analysis demonstrated predominant localization of the rAAV FIX genome in liver and spleen after tail vein injection with a higher proportion in liver after portal vein injection. Therapeutic levels of hFIX were detected in the majority of immunocompetent mice (21 of 22) following intravenous administration of rAAV vector without the development of anti-hFIX antibodies, but hFIX was not detected in 14 immunocompetent mice following intramuscular administration, irrespective of strain. Instead, neutralizing anti-hFIX antibodies were detected in all the mice. These observations may have important implications for hemophilia B gene therapy with rAAV vectors

Modeling the emergence of universality in color naming patterns

The empirical evidence that human color categorization exhibits some universal patterns beyond superficial discrepancies across different cultures is a major breakthrough in cognitive science. As observed in the World Color Survey (WCS), indeed, any two groups of individuals develop quite different categorization patterns, but some universal properties can be identified by a statistical analysis over a large number of populations. Here, we reproduce the WCS in a numerical model in which different populations develop independently their own categorization systems by playing elementary language games. We find that a simple perceptual constraint shared by all humans, namely the human Just Noticeable Difference (JND), is sufficient to trigger the emergence of universal patterns that unconstrained cultural interaction fails to produce. We test the results of our experiment against real data by performing the same statistical analysis proposed to quantify the universal tendencies shown in the WCS [Kay P and Regier T. (2003) Proc. Natl. Acad. Sci. USA 100: 9085-9089], and obtain an excellent quantitative agreement. This work confirms that synthetic modeling has nowadays reached the maturity to contribute significantly to the ongoing debate in cognitive science.Comment: Supplementery Information available here http://www.pnas.org/content/107/6/2403/suppl/DCSupplementa

Limits of Disclosure

One big focus of attention, criticism, and proposals for reform in the aftermath of the 2008 financial crisis has been securities disclosure. Many commentators have emphasized the complexity of the securities being sold, arguing that no one could understand the disclosure. Some observers have noted that disclosures were sometimes false or incomplete. What follows these issues, to some commentators, is that, whatever other lessons we may learn from the crisis, we need to improve disclosure. How should it be improved? Commentators often lament the frailties of human understanding, notably including those of everyday retail investors—people who do not understand or even read disclosure. This leads, naturally and unsurprisingly, to prescriptions for yet more disclosure, simpler disclosure, and financial literacy education. We believe that improvements in disclosure will not do much to prevent or minimize the effects of future crises. Indeed, the role of disclosure in investment decisions is far more limited, and far less straightforward, than is typically assumed. To caricature a bit for ease of exposition, the straightforward story is as follows: Read carefully, understand what you read, conduct any additional inquiry you deem appropriate, and then decide—if the security seems good, buy it; if not, don’t. Also, consider that whoever is selling you the security knows more than you do about it and has an incentive to present it more favorably than it warrants. But many investors, even sophisticated investors, do not start with cautious or neutral presumptions about a security and do not carefully read the disclosure to appraise the security on its merits before deciding whether to invest. As the literature extensively discusses, investors may be eager to buy “the hot new thing” that their peers are buying. Why do the peers buy it? One part of the story may be the old and often-told explanation: some investors tired of “boring” returns, saw an opportunity to supercharge their yields, and believed the perennial pitch made for new financial instruments—that they offered more return than risk. But our aim is not to explain what motivated investor behavior; our aim is to point out what did not sufficiently motivate investor behavior. Our argument is not just about the present crisis. Indeed, the complex role that disclosure plays in an investor’s decision as to whether to buy a security is just one example of disclosure’s limits. Those limits reflect the complexity of human decisionmaking. Why should disclosure work? The obvious answers are that better information should make for better decisions and that the specter of disclosure should constrain behavior. But these answers are importantly incomplete. Better information should, in principle, lead to better decisions, but other factors may be far more important. This was the case with disclosure regarding the securities at issue in the financial crisis. We discuss another example as well: executive compensation disclosures

Limits of Disclosure

One big focus of attention, criticism, and proposals for reform in the aftermath of the 2008 financial crisis has been securities disclosure. Many commentators have emphasized the complexity of the securities being sold, arguing that no one could understand the disclosure. Some observers have noted that disclosures were sometimes false or incomplete. What follows these issues, to some commentators, is that, whatever other lessons we may learn from the crisis, we need to improve disclosure. How should it be improved? Commentators often lament the frailties of human understanding, notably including those of everyday retail investors—people who do not understand or even read disclosure. This leads, naturally and unsurprisingly, to prescriptions for yet more disclosure, simpler disclosure, and financial literacy education. We believe that improvements in disclosure will not do much to prevent or minimize the effects of future crises. Indeed, the role of disclosure in investment decisions is far more limited, and far less straightforward, than is typically assumed. To caricature a bit for ease of exposition, the straightforward story is as follows: Read carefully, understand what you read, conduct any additional inquiry you deem appropriate, and then decide—if the security seems good, buy it; if not, don’t. Also, consider that whoever is selling you the security knows more than you do about it and has an incentive to present it more favorably than it warrants. But many investors, even sophisticated investors, do not start with cautious or neutral presumptions about a security and do not carefully read the disclosure to appraise the security on its merits before deciding whether to invest. As the literature extensively discusses, investors may be eager to buy “the hot new thing” that their peers are buying. Why do the peers buy it? One part of the story may be the old and often-told explanation: some investors tired of “boring” returns, saw an opportunity to supercharge their yields, and believed the perennial pitch made for new financial instruments—that they offered more return than risk. But our aim is not to explain what motivated investor behavior; our aim is to point out what did not sufficiently motivate investor behavior. Our argument is not just about the present crisis. Indeed, the complex role that disclosure plays in an investor’s decision as to whether to buy a security is just one example of disclosure’s limits. Those limits reflect the complexity of human decisionmaking. Why should disclosure work? The obvious answers are that better information should make for better decisions and that the specter of disclosure should constrain behavior. But these answers are importantly incomplete. Better information should, in principle, lead to better decisions, but other factors may be far more important. This was the case with disclosure regarding the securities at issue in the financial crisis. We discuss another example as well: executive compensation disclosures

Entangled networks, synchronization, and optimal network topology

A new family of graphs, {\it entangled networks}, with optimal properties in many respects, is introduced. By definition, their topology is such that optimizes synchronizability for many dynamical processes. These networks are shown to have an extremely homogeneous structure: degree, node-distance, betweenness, and loop distributions are all very narrow. Also, they are characterized by a very interwoven (entangled) structure with short average distances, large loops, and no well-defined community-structure. This family of nets exhibits an excellent performance with respect to other flow properties such as robustness against errors and attacks, minimal first-passage time of random walks, efficient communication, etc. These remarkable features convert entangled networks in a useful concept, optimal or almost-optimal in many senses, and with plenty of potential applications computer science or neuroscience.Comment: Slightly modified version, as accepted in Phys. Rev. Let

Sustained high-level expression of human factor IX (hFIX) after liver-targeted delivery of recombinant adeno-associated virus encoding the hFIX gene in rhesus macaques

The feasibility, safety, and efficacy of liver-directed gene transfer was evaluated in 5 male macaques (aged 2.5 to 6.5 years) by using a recombinant adeno-associated viral (rAAV) vector (rAAV-2 CAGG-hFIX) that had previously mediated persistent therapeutic expression of human factor IX (hFIX; 6%-10% of physiologic levels) in murine models. A dose of 4 × 1012 vector genomes (vgs)/kg of body weight was administered through the hepatic artery or portal vein. Persistence of the rAAV vgs as circular monomers and dimers and high-molecular-weight concatamers was documented in liver tissue by Southern blot analysis for periods of up to 1 year. Vector particles were present in plasma, urine, or saliva for several days after infusion (as shown by polymerase chain reaction analysis), and the vgs were detected in spleen tissue at low copy numbers. An enzyme-linked immunosorption assay capable of detecting between 1% and 25% of normal levels of hFIX in rhesus plasma was developed by using hyperimmune serum from a rhesus monkey that had received an adenoviral vector encoding hFIX. Two macaques having 3 and 40 rAAV genome equivalents/cell, respectively, in liver tissue had 4% and 8% of normal physiologic plasma levels of hFIX, respectively. A level of hFIX that was 3% of normal levels was transiently detected in one other macaque, which had a genome copy number of 25 before abrogation by a neutralizing antibody (inhibitor) to hFIX. This nonhuman-primate model will be useful in further evaluation and development of rAAV vectors for gene therapy of hemophilia B. © 2002 by The American Society of Hematology

Network synchronization: Optimal and Pessimal Scale-Free Topologies

By employing a recently introduced optimization algorithm we explicitely design optimally synchronizable (unweighted) networks for any given scale-free degree distribution. We explore how the optimization process affects degree-degree correlations and observe a generic tendency towards disassortativity. Still, we show that there is not a one-to-one correspondence between synchronizability and disassortativity. On the other hand, we study the nature of optimally un-synchronizable networks, that is, networks whose topology minimizes the range of stability of the synchronous state. The resulting ``pessimal networks'' turn out to have a highly assortative string-like structure. We also derive a rigorous lower bound for the Laplacian eigenvalue ratio controlling synchronizability, which helps understanding the impact of degree correlations on network synchronizability.Comment: 11 pages, 4 figs, submitted to J. Phys. A (proceedings of Complex Networks 2007