Risk vs. Profit-Potential: A Model for Corporate Strategy

A firm whose net earnings are uncertain, and that is subject to the risk of bankruptcy, must choose between paying dividends and retaining earnings in a liquid reserve. Also, different operating strategies imply different combinations of expected return and variance. We model the firm\u27s cash reserve as the difference between the cumulative net earnings and the cumulative dividends. The first is a diffusion (additive), whose drift/volatility pair is chosen dynamically from a finite set, A. The second is an arbitrary nondecreasing process, chosen by the firm. The firm\u27s strategy must be nonclairvoyant. The firm is bankrupt at the first time, T, at which the cash reserve falls to zero (T may be infinite), and the firm\u27s objective is to maximize the expected total discounted dividends from 0 to T, given an initial reserve, x; denote this maximum by V(x). We calculate V explicitly, as a function of the set A and the discount rate. The optimal policy has the form: (1) pay no dividends if the reserve is less than some critical level, a, and pay out all of the excess above a; (2) choose the drift/volatility pairs from the upper extreme points of the convex hull of A, between the pair that minimizes the ratio of volatility to drift and the pair that maximizes the drift; furthermore, the firm switches to successively higher volatility/drift ratios as the reserve increases to a. Finally, for the optimal policy, the firm is bankrupt in finite time, with probability one

Communication and optimal hierarchical networks

We study a general and simple model for communication processes. In the model, agents in a network (in particular, an organization) interchange information packets following simple rules that take into account the limited capability of the agents to deal with packets and the cost associated to the existence of open communication channels. Due to the limitation in the capability, the network collapses under certain conditions. We focus on when the collapse occurs for hierarchical networks and also on the influence of the flatness or steepness of the structure. We find that the need for hierarchy is related to the existence of costly connections.Comment: 7 pages, 2 figures. NATO ARW on Econophysic

Lectures du mélodrame : Max Ophuls et le film de femme

Peter Brooks, dans son ouvrage à présent classique The Melodramatic Imagination. Balzac, Henry James, Melodrama and the Mode of Excess (1985), décrit le mélodrame comme la forme éthique et esthétique sous-jacente qui définira la narration dans la culture profane moderne. Il commence par citer Charles Nodier : « Qu’on n’aille pas s’y tromper, ce n’était pas peu de chose que le mélodrame ; c’était la moralité de la révolution. » (p. 1) Pour Brooks, « le mélodrame […] semble une forme particuliè..

Communication in networks with hierarchical branching

We present a simple model of communication in networks with hierarchical branching. We analyze the behavior of the model from the viewpoint of critical systems under different situations. For certain values of the parameters, a continuous phase transition between a sparse and a congested regime is observed and accurately described by an order parameter and the power spectra. At the critical point the behavior of the model is totally independent of the number of hierarchical levels. Also scaling properties are observed when the size of the system varies. The presence of noise in the communication is shown to break the transition. Despite the simplicity of the model, the analytical results are a useful guide to forecast the main features of real networks.Comment: 4 pages, 3 figures. Final version accepted in PR

Optimal network topologies for local search with congestion

The problem of searchability in decentralized complex networks is of great importance in computer science, economy and sociology. We present a formalism that is able to cope simultaneously with the problem of search and the congestion effects that arise when parallel searches are performed, and obtain expressions for the average search cost--written in terms of the search algorithm and the topological properties of the network--both in presence and abscence of congestion. This formalism is used to obtain optimal network structures for a system using a local search algorithm. It is found that only two classes of networks can be optimal: star-like configurations, when the number of parallel searches is small, and homogeneous-isotropic configurations, when the number of parallel searches is large.Comment: 4 pages. Final version accepted in PR

Effect of nocturnal Temperature-controlled Laminar Airflow on the reduction of severe exacerbations in patients with severe allergic asthma: a meta-analysis

Background: Allergen avoidance is important in allergic asthma management. Nocturnal treatment with Temperature-controlled Laminar Airflow (TLA) has been shown to provide a significant reduction in the exposure to allergens in the breathing zone, leading to a long-term reduction in airway inflammation and improvement in Quality of life (QoL). Allergic asthma patients symptomatic on Global Initiative for Asthma (GINA) step 4/5 were found to benefit the most as measured by Asthma Quality of Life Questionnaire (AQLQ). However, the effect of TLA on severe asthma exacerbations is uncertain and therefore a meta-analysis was performed. Methods: Patients with severe allergic asthma (GINA 4/5) were extracted from two 1-year randomised, double-blind, placebo-controlled trials conducted with TLA. A meta-analysis of the effect on severe exacerbations was performed by negative binomial regression in a sequential manner, defined by baseline markers of asthma control (symptoms and QoL scores). Results: The pooled dataset included 364patients. Patients with more symptoms at baseline (ACT3; N=179), had a significant mean 41% reduction in severe exacerbations (RR=0.59 (0.38-0.90); p=0.015) in favour of TLA. Higher ACQ7 cut-points of 3.5-4.5 resulted in significant reductions of 48-59%.More uncontrolled patients based on AQLQ total and symptom domains ≤3.0 at baseline also showed a significant reduction in severe exacerbations for TLA vs. placebo ((47% (p=0.037) and 53% (p=0.011), respectively). The meta-analysis also confirmed a significant difference in AQLQ-responders ((Minimal Clinically Important Difference)≥0.5; 74% vs. 43%, p=0.04). Conclusion: This meta-analysis of individual patient data shows a beneficial effect on severe exacerbations and quality of life for TLA over placebo in more symptomatic patients with severe allergic asthma. These outcomes support the national management recommendations for patients with symptomatic severe allergic asthma. The actual effect of TLA on severe exacerbations should be confirmed in a prospective study with larger numbers of patients