The Pricing of Event Risks with Parameter Uncertainty

Financial instruments whose payoffs are linked to exogenous events, such as the occurrence of a natural catastrophe or an unusual weather pattern depend crucially on actuarial models for determining event (e.g., default) probabilities. In many instances, investors appear to receive premiums far in excess of these modeled actuarial probabilities, even for event risks that are uncorrelated with returns on other financial assets. Some have attributed these larger spreads to uncertainty in the probabilities generated by the models. We provide a simple model of such 'parameter uncertainty' and demonstrate how it affects rational investors' demand for event risk exposures. We show that while parameter uncertainty does indeed affect bond spreads, it does not tend to increase spreads by much. Indeed, the spread increases due to parameter uncertainty in our numerical examples are on the order of only 1-2 basis points. Moreover, in many instances, including those that have the most sensible correlation settings, parameter uncertainty tends to decrease the size of bond spreads. We therefore argue that parameter uncertainty does not appear to be a satisfactory explanation for high event-risk returns.

Is translation priming asymmetry due to partial awareness of the prime

A 50ms prime duration is often adopted in both L1-L2 and L2-L1 directions in the cross-language priming paradigm. It is unknown how aware bilinguals are of the briefly presented primes of different scripts; and whether the degree of awareness of L1 and L2 primes is at a similar level. Kouider and Dupoux’s (2004) proposal of partial awareness suggests that 50ms English primes were sufficient to make a semantic interpretation. It is unclear whether this is the case when processing one’s L2 or a different script. Experiment 1 was designed to measure the comparable prime durations for semantic interpretation of Chinese primes vs. English primes. Experiment 2 tested whether partial awareness of primes would cause priming asymmetry. Our findings demonstrate that a 50ms prime duration gave rise to different degrees of semantic activation in different scripts and L1/L2. However, increasing prime duration on L2 primes did not produce L2-L1 priming

Reduced Expression of Inflammatory Genes in Deceased Donor Kidneys Undergoing Pulsatile Pump Preservation

Background The use of expanded criteria donor kidneys (ECD) had been associated with worse outcomes. Whole gene expression of pre-implantation allograft biopsies from deceased donor kidneys (DDKs) was evaluated to compare the effect of pulsatile pump preservation (PPP) vs. cold storage preservation (CSP) on standard and ECD kidneys. Methodology/Principal Findings 99 pre-implantation DDK biopsies were studied using gene expression with GeneChips. Kidneys transplant recipients were followed post transplantation for 35.8 months (range = 24–62). The PPP group included 60 biopsies (cold ischemia time (CIT) = 1,367+/−509 minutes) and the CSP group included 39 biopsies (CIT = 1,022+/−485 minutes) (P Conclusions/Significance Inflammation was the most important up-regulated pattern associated with pre-implantation biopsies undergoing CSP even when the PPP group has a larger number of ECD kidneys. No significant difference was observed in delayed graft function incidence and graft function post-transplantation. These findings support the use of PPP in ECD donor kidneys