Myopic Loss Aversion, Asymmetric Correlations, and the Home Bias

Myopic loss aversion has been used to explain why a high equity premium might be consistent with plausible levels of risk aversion. The intuition is that it plays the role of high risk aversion in portfolio choice. But if so, should these agents not perceive larger gains from international diversification than standard preference agents with realistic levels of risk aversion? They might not because stock market returns are asymmetrically correlated. We analyze the portfolio problem of a myopic loss averse investor who has to choose between home and foreign equities in the presence of asymmetrically correlated returns. Perhaps surprisingly, depending on the horizon, this investor behaves similarly to one with standard preferences in the context of the home bias puzzlemyopic loss aversion, home bias, asymmetric correlations, equity premium puzzle

Stability of cluster solutions in a cooperative consumer chain model

This is the author's accepted manuscript. The final published article is available from the link below. Copyright @ Springer-Verlag Berlin Heidelberg 2012.We study a cooperative consumer chain model which consists of one producer and two consumers. It is an extension of the Schnakenberg model suggested in Gierer and Meinhardt [Kybernetik (Berlin), 12:30-39, 1972] and Schnakenberg (J Theor Biol, 81:389-400, 1979) for which there is only one producer and one consumer. In this consumer chain model there is a middle component which plays a hybrid role: it acts both as consumer and as producer. It is assumed that the producer diffuses much faster than the first consumer and the first consumer much faster than the second consumer. The system also serves as a model for a sequence of irreversible autocatalytic reactions in a container which is in contact with a well-stirred reservoir. In the small diffusion limit we construct cluster solutions in an interval which have the following properties: The spatial profile of the third component is a spike. The profile for the middle component is that of two partial spikes connected by a thin transition layer. The first component in leading order is given by a Green's function. In this profile multiple scales are involved: The spikes for the middle component are on the small scale, the spike for the third on the very small scale, the width of the transition layer for the middle component is between the small and the very small scale. The first component acts on the large scale. To the best of our knowledge, this type of spiky pattern has never before been studied rigorously. It is shown that, if the feedrates are small enough, there exist two such patterns which differ by their amplitudes.We also study the stability properties of these cluster solutions. We use a rigorous analysis to investigate the linearized operator around cluster solutions which is based on nonlocal eigenvalue problems and rigorous asymptotic analysis. The following result is established: If the time-relaxation constants are small enough, one cluster solution is stable and the other one is unstable. The instability arises through large eigenvalues of order O(1). Further, there are small eigenvalues of order o(1) which do not cause any instabilities. Our approach requires some new ideas: (i) The analysis of the large eigenvalues of order O(1) leads to a novel system of nonlocal eigenvalue problems with inhomogeneous Robin boundary conditions whose stability properties have been investigated rigorously. (ii) The analysis of the small eigenvalues of order o(1) needs a careful study of the interaction of two small length scales and is based on a suitable inner/outer expansion with rigorous error analysis. It is found that the order of these small eigenvalues is given by the smallest diffusion constant ε22.RGC of Hong Kon

Predicting Phenotypic Diversity and the Underlying Quantitative Molecular Transitions

During development, signaling networks control the formation of multicellular patterns. To what extent quantitative fluctuations in these complex networks may affect multicellular phenotype remains unclear. Here, we describe a computational approach to predict and analyze the phenotypic diversity that is accessible to a developmental signaling network. Applying this framework to vulval development in C. elegans, we demonstrate that quantitative changes in the regulatory network can render ~500 multicellular phenotypes. This phenotypic capacity is an order-of-magnitude below the theoretical upper limit for this system but yet is large enough to demonstrate that the system is not restricted to a select few outcomes. Using metrics to gauge the robustness of these phenotypes to parameter perturbations, we identify a select subset of novel phenotypes that are the most promising for experimental validation. In addition, our model calculations provide a layout of these phenotypes in network parameter space. Analyzing this landscape of multicellular phenotypes yielded two significant insights. First, we show that experimentally well-established mutant phenotypes may be rendered using non-canonical network perturbations. Second, we show that the predicted multicellular patterns include not only those observed in C. elegans, but also those occurring exclusively in other species of the Caenorhabditis genus. This result demonstrates that quantitative diversification of a common regulatory network is indeed demonstrably sufficient to generate the phenotypic differences observed across three major species within the Caenorhabditis genus. Using our computational framework, we systematically identify the quantitative changes that may have occurred in the regulatory network during the evolution of these species. Our model predictions show that significant phenotypic diversity may be sampled through quantitative variations in the regulatory network without overhauling the core network architecture. Furthermore, by comparing the predicted landscape of phenotypes to multicellular patterns that have been experimentally observed across multiple species, we systematically trace the quantitative regulatory changes that may have occurred during the evolution of the Caenorhabditis genus

Robust Asymmetric Localization of Planar Polarity Proteins Is Associated with Organization into Signalosome-like Domains of Variable Stoichiometry.

In developing epithelia, the core planar polarity proteins physically interact with each other and localize asymmetrically at opposite cell ends, forming intercellular complexes that link the polarity of neighboring cells. Using quantitative imaging to examine the composition of the core protein complex in vivo, we find that complex composition is unexpectedly plastic. The transmembrane proteins Frizzled and Flamingo form a stoichiometric nucleus in the complex, while the relative levels of the other four core proteins can vary independently. Exploring the functional consequences of this, we show that robust cell polarization is achieved over a range of complex stoichiometries but is dependent on maintaining appropriate levels of the components Frizzled and Strabismus. We propose that the core proteins assemble into signalosome-like structures, where stable association is not dependent on one-to-one interactions with binding partners, and signaling functions can act over a wide range of complex compositions

A Dual Function for Prickle in Regulating Frizzled Stability during Feedback-Dependent Amplification of Planar Polarity

The core planar polarity pathway coordinates epithelial cell polarity during animal development, and loss of its activity gives rise to a range of defects, from aberrant morphogenetic cell movements to failure to correctly orient structures, such as hairs and cilia. The core pathway functions via a mechanism involving segregation of its protein components to opposite cells ends, where they form asymmetric intracellular complexes that couple cell-cell polarity. This segregation is a self-organizing process driven by feedback interactions between the core proteins themselves. Despite intense efforts, the molecular pathways underlying feedback have proven difficult to elucidate using conventional genetic approaches. Here we investigate core protein function during planar polarization of the Drosophila wing by combining quantitative measurements of protein dynamics with loss-of-function genetics, mosaic analysis, and temporal control of gene expression. Focusing on the key core protein Frizzled, we show that its stable junctional localization is promoted by the core proteins Strabismus, Dishevelled, Prickle, and Diego. In particular, we show that the stabilizing function of Prickle on Frizzled requires Prickle activity in neighboring cells. Conversely, Prickle in the same cell has a destabilizing effect on Frizzled. This destabilizing activity is dependent on the presence of Dishevelled and blocked in the absence of Dynamin and Rab5 activity, suggesting an endocytic mechanism. Overall, our approach reveals for the first time essential in vivo stabilizing and destabilizing interactions of the core proteins required for self-organization of planar polarity

Polarity, cell division, and out-of-equilibrium dynamics control the growth of epithelial structures

The growth of a well-formed epithelial structure is governed by mechanical constraints, cellular apico-basal polarity, and spatially controlled cell division. Here we compared the predictions of a mathematical model of epithelial growth with the morphological analysis of 3D epithelial structures. In both in vitro cyst models and in developing epithelial structures in vivo, epithelial growth could take place close to or far from mechanical equilibrium, and was determined by the hierarchy of time-scales of cell division, cell-cell rearrangements, and lumen dynamics. Equilibrium properties could be inferred by the analysis of cell-cell contact topologies, and the nonequilibrium phenotype was altered by inhibiting ROCK activity. The occurrence of an aberrant multilumen phenotype was linked to fast nonequilibrium growth, even when geometric control of cell division was correctly enforced. We predicted and verified experimentally that slowing down cell division partially rescued a multilumen phenotype induced by altered polarity. These results improve our understanding of the development of epithelial organs and, ultimately, of carcinogenesi

Order and Stochastic Dynamics in Drosophila Planar Cell Polarity

Cells in the wing blade of Drosophila melanogaster exhibit an in-plane polarization causing distal orientation of hairs. Establishment of the Planar Cell Polarity (PCP) involves intercellular interactions as well as a global orienting signal. Many of the genetic and molecular components underlying this process have been experimentally identified and a recently advanced system-level model has suggested that the observed mutant phenotypes can be understood in terms of intercellular interactions involving asymmetric localization of membrane bound proteins. Among key open questions in understanding the emergence of ordered polarization is the effect of stochasticity and the role of the global orienting signal. These issues relate closely to our understanding of ferromagnetism in physical systems. Here we pursue this analogy to understand the emergence of PCP order. To this end we develop a semi-phenomenological representation of the underlying molecular processes and define a “phase diagram” of the model which provides a global view of the dependence of the phenotype on parameters. We show that the dynamics of PCP has two regimes: rapid growth in the amplitude of local polarization followed by a slower process of alignment which progresses from small to large scales. We discuss the response of the tissue to various types of orienting signals and show that global PCP order can be achieved with a weak orienting signal provided that it acts during the early phase of the process. Finally we define and discuss some of the experimental predictions of the model

A Modified Consumer Inkjet for Spatiotemporal Control of Gene Expression

This paper presents a low-cost inkjet dosing system capable of continuous, two-dimensional spatiotemporal regulation of gene expression via delivery of diffusible regulators to a custom-mounted gel culture of E. coli. A consumer-grade, inkjet printer was adapted for chemical printing; E. coli cultures were grown on 750 µm thick agar embedded in micro-wells machined into commercial compact discs. Spatio-temporal regulation of the lac operon was demonstrated via the printing of patterns of lactose and glucose directly into the cultures; X-Gal blue patterns were used for visual feedback. We demonstrate how the bistable nature of the lac operon's feedback, when perturbed by patterning lactose (inducer) and glucose (inhibitor), can lead to coordination of cell expression patterns across a field in ways that mimic motifs seen in developmental biology. Examples of this include sharp boundaries and the generation of traveling waves of mRNA expression. To our knowledge, this is the first demonstration of reaction-diffusion effects in the well-studied lac operon. A finite element reaction-diffusion model of the lac operon is also presented which predicts pattern formation with good fidelity

Experimental and theoretical evidence for bidirectional signaling via core planar polarity protein complexes in Drosophila

In developing tissues, sheets of cells become planar polarized, enabling coordination of cell behaviors. It has been suggested that “signaling” of polarity information between cells may occur either bidirectionally or monodirectionally between the molecules Frizzled (Fz) and Van Gogh (Vang). Using computational modeling we find that both bidirectional and monodirectional signaling models reproduce known non-autonomous phenotypes derived from patches of mutant tissue of key molecules but predict different phenotypes from double mutant tissue, which have previously given conflicting experimental results. Furthermore, we re-examine experimental phenotypes in the Drosophila wing, concluding that signaling is most likely bidirectional. Our modeling suggests that bidirectional signaling can be mediated either indirectly via bidirectional feedbacks between asymmetric intercellular protein complexes or directly via different affinities for protein binding in intercellular complexes, suggesting future avenues for investigation. Our findings offer insight into mechanisms of juxtacrine cell signaling and how tissue-scale properties emerge from individual cell behaviors

Is a persistent global bias necessary for the establishment of planar cell polarity?

Planar cell polarity (PCP)–the coordinated polarisation of a whole field of cells within the plane of a tissue–relies on the interaction of three modules: a global module that couples individual cellular polarity to the tissue axis, a local module that aligns the axis of polarisation of neighbouring cells, and a readout module that directs the correct outgrowth of PCP-regulated structures such as hairs and bristles. While much is known about the molecular components that are required for PCP, the functional details of–and interactions between–the modules remain unclear. In this work, we perform a mathematical and computational analysis of two previously proposed computational models of the local module (Amonlirdviman et al., Science, 307, 2005; Le Garrec et al., Dev. Dyn., 235, 2006). Both models can reproduce wild-type and mutant phenotypes of PCP observed in the Drosophila wing under the assumption that a tissue-wide polarity cue from the global module persists throughout the development of PCP. We demonstrate that both models can also generate tissue-level PCP when provided with only a transient initial polarity cue. However, in these models such transient cues are not sufficient to ensure robustness of the resulting cellular polarisation