Reciprocity as a foundation of financial economics

This paper argues that the subsistence of the fundamental theorem of contemporary financial mathematics is the ethical concept ‘reciprocity’. The argument is based on identifying an equivalence between the contemporary, and ostensibly ‘value neutral’, Fundamental Theory of Asset Pricing with theories of mathematical probability that emerged in the seventeenth century in the context of the ethical assessment of commercial contracts in a framework of Aristotelian ethics. This observation, the main claim of the paper, is justified on the basis of results from the Ultimatum Game and is analysed within a framework of Pragmatic philosophy. The analysis leads to the explanatory hypothesis that markets are centres of communicative action with reciprocity as a rule of discourse. The purpose of the paper is to reorientate financial economics to emphasise the objectives of cooperation and social cohesion and to this end, we offer specific policy advice

Serotonin Differentially Regulates Short- and Long-Term Prediction of Rewards in the Ventral and Dorsal Striatum

BACKGROUND: The ability to select an action by considering both delays and amount of reward outcome is critical for maximizing long-term benefits. Although previous animal experiments on impulsivity have suggested a role of serotonin in behaviors requiring prediction of delayed rewards, the underlying neural mechanism is unclear. METHODOLOGY/PRINCIPAL FINDINGS: To elucidate the role of serotonin in the evaluation of delayed rewards, we performed a functional brain imaging experiment in which subjects chose small-immediate or large-delayed liquid rewards under dietary regulation of tryptophan, a precursor of serotonin. A model-based analysis revealed that the activity of the ventral part of the striatum was correlated with reward prediction at shorter time scales, and this correlated activity was stronger at low serotonin levels. By contrast, the activity of the dorsal part of the striatum was correlated with reward prediction at longer time scales, and this correlated activity was stronger at high serotonin levels. CONCLUSIONS/SIGNIFICANCE: Our results suggest that serotonin controls the time scale of reward prediction by differentially regulating activities within the striatum

Positive Feedback between Transcriptional and Kinase Suppression in Nematodes with Extraordinary Longevity and Stress Resistance

Insulin/IGF-1 signaling (IIS) regulates development and metabolism, and modulates aging, of Caenorhabditis elegans. In nematodes, as in mammals, IIS is understood to operate through a kinase-phosphorylation cascade that inactivates the DAF-16/FOXO transcription factor. Situated at the center of this pathway, phosphatidylinositol 3-kinase (PI3K) phosphorylates PIP2 to form PIP3, a phospholipid required for membrane tethering and activation of many signaling molecules. Nonsense mutants of age-1, the nematode gene encoding the class-I catalytic subunit of PI3K, produce only a truncated protein lacking the kinase domain, and yet confer 10-fold greater longevity on second-generation (F2) homozygotes, and comparable gains in stress resistance. Their F1 parents, like weaker age-1 mutants, are far less robust—implying that maternally contributed trace amounts of PI3K activity or of PIP3 block the extreme age-1 phenotypes. We find that F2-mutant adults have <10% of wild-type kinase activity in vitro and <60% of normal phosphoprotein levels in vivo. Inactivation of PI3K not only disrupts PIP3-dependent kinase signaling, but surprisingly also attenuates transcripts of numerous IIS components, even upstream of PI3K, and those of signaling molecules that cross-talk with IIS. The age-1(mg44) nonsense mutation results, in F2 adults, in changes to kinase profiles and to expression levels of multiple transcripts that distinguish this mutant from F1 age-1 homozygotes, a weaker age-1 mutant, or wild-type adults. Most but not all of those changes are reversed by a second mutation to daf-16, implicating both DAF-16/ FOXO–dependent and –independent mechanisms. RNAi, silencing genes that are downregulated in long-lived worms, improves oxidative-stress resistance of wild-type adults. It is therefore plausible that attenuation of those genes in age-1(mg44)-F2 adults contributes to their exceptional survival. IIS in nematodes (and presumably in other species) thus involves transcriptional as well as kinase regulation in a positive-feedback circuit, favoring either survival or reproduction. Hyperlongevity of strong age-1(mg44) mutants may result from their inability to reset this molecular switch to the reproductive mode

Lawson criterion for ignition exceeded in an inertial fusion experiment

For more than half a century, researchers around the world have been engaged in attempts to achieve fusion ignition as a proof of principle of various fusion concepts. Following the Lawson criterion, an ignited plasma is one where the fusion heating power is high enough to overcome all the physical processes that cool the fusion plasma, creating a positive thermodynamic feedback loop with rapidly increasing temperature. In inertially confined fusion, ignition is a state where the fusion plasma can begin "burn propagation" into surrounding cold fuel, enabling the possibility of high energy gain. While "scientific breakeven" (i.e., unity target gain) has not yet been achieved (here target gain is 0.72, 1.37 MJ of fusion for 1.92 MJ of laser energy), this Letter reports the first controlled fusion experiment, using laser indirect drive, on the National Ignition Facility to produce capsule gain (here 5.8) and reach ignition by nine different formulations of the Lawson criterion