Generalized pricing formulas for stochastic volatility jump diffusion models applied to the exponential Vasicek model

Path integral techniques for the pricing of financial options are mostly based on models that can be recast in terms of a Fokker-Planck differential equation and that, consequently, neglect jumps and only describe drift and diffusion. We present a method to adapt formulas for both the path-integral propagators and the option prices themselves, so that jump processes are taken into account in conjunction with the usual drift and diffusion terms. In particular, we focus on stochastic volatility models, such as the exponential Vasicek model, and extend the pricing formulas and propagator of this model to incorporate jump diffusion with a given jump size distribution. This model is of importance to include non-Gaussian fluctuations beyond the Black-Scholes model, and moreover yields a lognormal distribution of the volatilities, in agreement with results from superstatistical analysis. The results obtained in the present formalism are checked with Monte Carlo simulations.Comment: 9 pages, 2 figures, 1 tabl

Cure or control: complying with biomedical regime of diabetes in Cameroon

<p>Abstract</p> <p>Background</p> <p>The objective of the study was to explore the cultural aspect of compliance, its underlying principles and how these cultural aspects can be used to improve patient centred care for diabetes in Cameroon.</p> <p>Methods</p> <p>We used participant observation to collect data from a rural and an urban health district of Cameroon from June 2001 to June 2003. Patients were studied in their natural settings through daily interactions with them. The analysis was inductive and a continuous process from the early stages of fieldwork.</p> <p>Results</p> <p>The ethnography revealed a lack of basic knowledge about diabetes and diabetes risk factors amongst people with diabetes. The issue of compliance was identified as one of the main themes in the process of treating diabetes. Compliance emerged as part of the discourse of healthcare providers in clinics and filtered into the daily discourses of people with diabetes. The clinical encounters offered treatment packages that were socially inappropriate therefore rejected or modified for most of the time by people with diabetes. Compliance to biomedical therapy suffered a setback for four main reasons: dealing with competing regimes of treatment; coming to terms with biomedical treatment of diabetes; the cost of biomedical therapy; and the impact of AIDS on accepting weight loss as a lifestyle measure in prescription packages. People with diabetes had fears about and negative opinions of accepting certain prescriptions that they thought could interfere with their accustomed social image especially that which had to do with bridging their relationship with ancestors and losing weight in the era of HIV/AIDS.</p> <p>Conclusion</p> <p>The cultural pressures on patients are responsible for patients' partial acceptance of and adherence to prescriptions. Understanding the self-image of patients and their background cultures are vital ingredients to improve diabetes care in low-income countries of Sub-Sahara Africa like Cameroon.</p

A new method for determining physician decision thresholds using empiric, uncertain recommendations

<p>Abstract</p> <p>Background</p> <p>The concept of risk thresholds has been studied in medical decision making for over 30 years. During that time, physicians have been shown to be poor at estimating the probabilities required to use this method. To better assess physician risk thresholds and to more closely model medical decision making, we set out to design and test a method that derives thresholds from actual physician treatment recommendations. Such an approach would avoid the need to ask physicians for estimates of patient risk when trying to determine individual thresholds for treatment. Assessments of physician decision making are increasingly relevant as new data are generated from clinical research. For example, recommendations made in the setting of ocular hypertension are of interest as a large clinical trial has identified new risk factors that should be considered by physicians. Precisely how physicians use this new information when making treatment recommendations has not yet been determined.</p> <p>Results</p> <p>We derived a new method for estimating treatment thresholds using ordinal logistic regression and tested it by asking ophthalmologists to review cases of ocular hypertension before expressing how likely they would be to recommend treatment. Fifty-eight physicians were recruited from the American Glaucoma Society. Demographic information was collected from the participating physicians and the treatment threshold for each physician was estimated. The method was validated by showing that while treatment thresholds varied over a wide range, the most common values were consistent with the 10-15% 5-year risk of glaucoma suggested by expert opinion and decision analysis.</p> <p>Conclusions</p> <p>This method has advantages over prior means of assessing treatment thresholds. It does not require physicians to explicitly estimate patient risk and it allows for uncertainty in the recommendations. These advantages will make it possible to use this method when assessing interventions intended to alter clinical decision making.</p