Herd behavior and contagion in financial markets

Imitative behavior and contagion are well-documented regularities of financial markets. We study whether they can occur in a two-asset economy where rational agents trade sequentially. When traders have gains from trade, informational cascades arise and prices fail to aggregate information dispersed among traders. During a cascade all informed traders with the same preferences choose the same action, i.e., they herd. Moreover, herd behavior can generate financial contagion. Informational cascades and herds can spill over from one asset to the other, pushing the price of the other asset far from its fundamental value

Herding and price convergence in a laboratory financial market

We study whether herding can arise in a laboratory financial market in which agents trade sequentially. Agents trade an asset whose value is unknown and whose price is efficiently set by a market maker. We show that the presence of a price mechanism destroys the possibility of herding. Most agents follow their private information and prices converge to the fundamental value. This result contrasts with the case of a fixed price, where herding and cascades arise. When the price moves, however, agents may behave as contrarian, i.e., they may trade against the market, something not accounted for by the theory. Finally, we study whether informational cascades arise when trade is costly (e.g, because of a Tobin tax). With trade costs, most subjects rationally decided not to trade and the price was unable to aggregate private information efficiently

Herd behavior and contagion in financial markets

We study a sequential trading financial market where there are gains from trade, that is, where informed traders have heterogeneous private values. We show that an informational cascade (i.e., a complete blockage of information) arises and prices fail to aggregate information dispersed among traders. During an informational cascade, all traders with the same preferences choose the same action, following the market (herding) or going against it (contrarianism). We also study financial contagion by extending our model to a two-asset economy. We show that informational cascades in one market can be generated by informational spillovers from the other. Such spillovers have pathological consequences, generating long-lasting misalignments between prices and fundamentals

Herd behavior in financial markets: an experiment with financial market professionals

We study herd behavior in a laboratory financial market with financial market professionals. An important novelty of the experimental design is the use of a strategy-like method. This allows us to detect herd behavior directly by observing subjects' decisions for all realizations of their private signal. In the paper, we compare two treatments: one in which the price adjusts to the order flow in such a way that herding should never occur, and one in which the presence of event uncertainty makes herding possible. In the first treatment, subjects seldom herd, in accordance with both the theory and previous experimental evidence on student subjects. A proportion of subjects, however, engage in contrarianism, something not accounted for by the theory. In the second treatment, the proportion of herding decisions increases, but not as much as the theory would suggest. Moreover, contrarianism disappears altogether. In both treatments, in contrast with what theory predicts, subjects sometimes prefer to abstain from trading, which affects the process of price discovery negatively

Transaction costs and informational cascades in financial markets: theory and experimental evidence

We study the effect of transaction costs (e.g., a trading fee or a transaction tax, like the Tobin tax) on the aggregation of private information in financial markets. We analyze a financial market à la Glosten and Milgrom, in which informed and uninformed traders trade in sequence with a market maker. Traders have to pay a cost in order to trade. We show that, eventually, all informed traders decide not to trade, independently of their private information, i.e., an informational cascade occurs. We replicated our financial market in the laboratory. We found that, in the experiment, informational cascades occur when the theory suggests they should. Nevertheless, the ability of the price to aggregate private information is not significantly affected

Endurant Types in Ontology-Driven Conceptual Modeling: Towards OntoUML 2.0

For over a decade now, a community of researchers has contributed to the development of the Unified Foundational Ontology (UFO) - aimed at providing foundations for all major conceptual modeling constructs. This ontology has led to the development of an Ontology-Driven Conceptual Modeling language dubbed OntoUML, reflecting the ontological micro-theories comprising UFO. Over the years, UFO and OntoUML have been successfully employed in a number of academic, industrial and governmental settings to create conceptual models in a variety of different domains. These experiences have pointed out to opportunities of improvement not only to the language itself but also to its underlying theory. In this paper, we take the first step in that direction by revising the theory of types in UFO in response to empirical evidence. The new version of this theory shows that many of the meta-types present in OntoUML (differentiating Kinds, Roles, Phases, Mixins, etc.) should be considered not as restricted to Substantial types but instead should be applied to model Endurant Types in general, including Relator types, Quality types and Mode types. We also contribute a formal characterization of this fragment of the theory, which is then used to advance a metamodel for OntoUML 2.0. Finally, we propose a computational support tool implementing this updated metamodel

Algebras and non-geometric flux vacua

In this work we classify the subalgebras satisfied by non-geometric Q-fluxes in type IIB orientifolds on T^6/(Z_2 x Z_2) with three moduli (S,T,U). We find that there are five subalgebras compatible with the symmetries, each one leading to a characteristic flux-induced superpotential. Working in the 4-dimensional effective supergravity we obtain families of supersymmetric AdS_4 vacua with all moduli stabilized at small string coupling g_s. Our results are mostly analytic thanks to a judicious parametrization of the non-geometric, RR and NSNS fluxes. We are also able to leave the flux-induced C_4 and C_8 RR tadpoles as free variables, thereby enabling us to study which values are allowed for each Q-subalgebra. Another novel outcome is the appearance of multiple vacua for special sets of fluxes. However, they generically have g_s > 1 unless the net number of O3/D3 or O7/D7 sources needed to cancel the tadpoles is large. We also discuss briefly the issues of axionic shift symmetries and cancellation of Freed-Witten anomalies.Comment: 61 pages, LaTex, v2: added reference

Gastrointestinal neuromuscular apparatus: An underestimated target of gut microbiota

Over the last few years, the importance of the resident intestinal microbiota in the pathogenesis of several gastro- intestinal diseases has been largely investigated. Growing evidence suggest that microbiota can influence gastro- intestinal motility. The current working hypothesis is that dysbiosis-driven mucosal alterations induce the production of several inflammatory/immune mediators which affect gut neuro-muscular functions. Besides these indirect mucosal-mediated effects, the present review highlights that recent evidence suggests that microbiota can directly affect enteric nerves and smooth muscle cells functions through its metabolic products or bacterial molecular components translocated from the intestinal lumen. Toll- like receptors, the bacterial recognition receptors, are expressed both on enteric nerves and smooth muscle and are emerging as potential mediators between microbiota and the enteric neuromuscular apparatus. Furthermore, the ongoing studies on probiotics support the hypothesis that the neuromuscular apparatus may represent a target of intervention, thus opening new physiopathological and therapeutic scenarios

Ovarian endometrioid adenocarcinoma diagnosed in pregnancy. a case report

The prevalence of adnexal masses pregnancy is about 0.19-8.8%. The malignancy rate is around 1-6%, and indeed most cases are benign masses. During pregnancy adnexal masses should be accurately evaluated to identify the patients who need surgery from those who need a 'wait-and-see' strategy. The authors report a case of 36-year-old woman (gravida 2, para 2, two vaginal deliveries) referred to the Gynecologic Department with diagnosis of endometrioid ovarian adenocarcinoma. The patient underwent laparotomic surgery with left salpingo-oophorectomy, total hysterectomy, pelvic and para-aortic lymphadenectomy, and peritoneal washing for optimal surgery staging. No ascites or residual tumour in the abdominal cavity were found macroscopically. Histopathology was negative for residual ovarian cancer. Currently the treatment and the management of ovarian cancer are not well established because scientific evidence is limited

Association of endometrioid ovarian carcinoma arising from endometriosis, endometrioid endometrial carcinoma, and high-grade undifferentiated endometrial sarcoma. a case report

Endometriosis is a chronic disease that affects women of reproductive age. Malignant transformation in endometriosis is considered to be an unusual event, only occurring in 0.7-0.1% of cases. However the association between endometriosis and endometrial cancer is not well defined. Also in literature, rare cases of uterine sarcoma, about 3% of all uterine malignancies, associated with endometriosis have been reported. The authors report a case of a 47-years-old Italian woman with histologic diagnosis of endometrioid ovarian carcinoma arising from endometriosis, endometrioid endometrial carcinoma, and undifferentiated endometrial sarcoma. Therefore there have been few studies addressing the relationship between endometrial stromal sarcomas (ESS), and endometriosis. Novel scientific findings are necessary to investigate a possible common pathway and an effective treatment, although complete tumor resection can reduce the recurrence rate