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We provide novel evidence for an equilibrium link between investors' disagreement, the market price of volatility and correlation, and the differential pricing of index and individual equity options. We show that belief disagreement is positively related to (i) the wedge between index and individual volatility risk premia, (ii) the different slope of the smile of index and individual options, and (iii) the correlation risk premium. Priced disagreement risk also explains returns of option volatility and correlation trading strategies in a way that is robust to the inclusion of other risk factors and different market conditions.

We implement a dynamic asset pricing experiment in the spirit of Lucas (1978) with storable assets and non-storable cash. In the first treatment, we impose diminishing marginal returns to cash to incentivize consumption smoothing across periods. We find that subjects use the asset to smooth consumption, although the asset trades at a discount relative to the risk-neutral fundamental price. This under-pricing is a departure from the asset price “bubbles” observed in the large experimental asset pricing literature originating with Smith et al. (1988) and can be rationalized by considering subjects’ risk aversion with respect to uncertain money earnings. In a second treatment, with no induced motivation for trade à la the Smith et al. design, we find that the asset trades at a premium relative to its expected value and that shareholdings are highly concentrated. Elimination of asset price uncertainty in additional experimental treatments serves to reinforce the same observations, and suggests that speculative behaviour explains the departure of prices from fundamental value in the absence of a consumption-smoothing motive for asset trades.

This paper investigates the behavior of asset prices in an endowment economy in which a representative agent with power utility consumes the dividends of multiple assets. The assets are Lucas trees; a collection of Lucas trees is a Lucas orchard. The model generates return correlations that vary endogenously, spiking at times of disaster. Since disasters spread across assets, the model generates large risk premia even for assets with stable cashflows. Very small assets may comove endogenously and hence earn positive risk premia even if their cashflows are independent of the rest of the economy. I provide conditions under which the variation in a small asset's price-dividend ratio can be attributed almost entirely to variation in its risk premium.

The definition of the node of the last universal common ancestor (LUCA) is justified in a topology of the unrooted universal tree. This definition allows previous analyses based on paralogous proteins to be extended to orthologous ones. In particular, the use of a thermophily index (based on the amino acids' propensity to enter the [hyper] thermophile proteins more frequently) and its correlation with the optimal growth temperature of the various organisms allow inferences to be made on the habitat in which the LUCA lived. The reconstruction of ancestral sequences by means of the maximum likelihood method and their attribution to the set of mesophilic or hyperthermophilic sequences have led to the following conclusions: the LUCA was a hyperthermophile \"organism,\" as were the ancestors of the Archaea and Bacteria domains, while the ancestor of the Eukarya domain was a mesophile. These conclusions are independent of the presence of hyperthermophile bacteria in the sample of sequences used in the analysis and are therefore independent of whether or not these are the first lines of divergence in the Bacteria domain, as observed in the topology of the universal tree of ribosomal RNA. These conclusions are thus more easily understood under the hypothesis that the origin of life took place at a high temperature.

The CAPM and the Arrow-Debreu pricing theories were essentially static in nature. The Consumption Capital Asset Pricing Model, the exclusive focus of the present chapter, extends asset pricing theory to allow for the trading of assets period by period as new information becomes available. Under the consumption capital asset pricing perspective, it is the properties of an economy’s equilibrium per-capita consumption series that ultimately determine asset prices and rates of return. The ability of this model class to replicate the historical aggregate stock market return premium above the risk free rate is discussed in detail.

Ecosystem science increasingly relies on highly derived metrics to synthesize across large datasets. However, full uncertainty associated with these metrics is seldom quantified. Our objective was to evaluate measurement error and model uncertainty in plot-based estimates of carbon stock and carbon change. We quantified the measurement error associated with live stems, deadwood and plot-level variables in temperate rainforest in New Zealand. We also quantified model uncertainty for heightdiameter allometry, stem volume equations and wood-density estimates. We used Monte Carlo simulation to assess the net effects on carbon stock and carbon change estimated using data from 227 plots from throughout New Zealand. Plot-to-plot variation was the greatest source of uncertainty, amounting to 9.1% of mean aboveground carbon stock estimates (201.11 MgC ha⁻¹). Propagation of the measurement error and model uncertainty resulted in a 1% increase in uncertainty (0.1% of mean stock estimate). Carbon change estimates (mean -0.86 MgC ha⁻¹ y⁻¹) were more uncertain, with sampling error equating to 56% of the mean, and when measurement error and model uncertainty were included this uncertainty increased by 35% (22.1% of the mean change estimate). For carbon change, the largest sources of measurement error were missed/double counted stems and fallen coarse woody debris. Overall, our findings show that national-scale plot-based estimates of carbon stock and carbon change in New Zealand are robust to measurement error and model uncertainty. We recommend that calculations of carbon stock and carbon change incorporate both these sources of uncertainty so that management implications and policy decisions can be assessed with the appropriate level of confidence.

The existence of LUCA in the distant past is the logical consequence of the binary mechanism of cell division. The biosphere in which LUCA and contemporaries were living was the product of a long cellular evolution from the origin of life to the second age of the RNA world. A parsimonious scenario suggests that the molecular fabric of LUCA was much simpler than those of modern organisms, explaining why the evolutionary tempo was faster at the time of LUCA than it was during the diversification of the three domains. Although LUCA was possibly equipped with a RNA genome and most likely lacked an ATP synthase, it was already able to perform basic metabolic functions and to produce efficient proteins. However, the proteome of LUCA and its inferred metabolism remains to be correctly explored by in-depth phylogenomic analyses and updated datasets. LUCA was probably a mesophile or a moderate thermophile since phylogenetic analyses indicate that it lacked reverse gyrase, an enzyme systematically present in all hyperthermophiles. The debate about the position of Eukarya in the tree of life, either sister group to Archaea or descendants of Archaea, has important implications to draw the portrait of LUCA. In the second alternative, one can a priori exclude the presence of specific eukaryotic features in LUCA. In contrast, if Archaea and Eukarya are sister group, some eukaryotic features, such as the spliceosome, might have been present in LUCA and later lost in Archaea and Bacteria. The nature of the LUCA virome is another matter of debate. I suggest here that DNA viruses only originated during the diversification of the three domains from an RNA-based LUCA to explain the odd distribution pattern of DNA viruses in the tree of life.

Soil spectroscopy has experienced a tremendous increase in soil property characterisation, and can be used not only in the laboratory but also from the space (imaging spectroscopy). Partial least squares (PLS) regression is one of the most common approaches for the calibration of soil properties using soil spectra. Besides functioning as a calibration method, PLS can also be used as a dimension reduction tool, which has scarcely been studied in soil spectroscopy. PLS components retained from high-dimensional spectral data can further be explored with the gradient-boosted decision tree (GBDT) method. Three soil sample categories were extracted from the Land Use/Land Cover Area Frame Survey (LUCAS) soil library according to the type of land cover (woodland, grassland, and cropland). First, PLS regression and GBDT were separately applied to build the spectroscopic models for soil organic carbon (OC), total nitrogen content (N), and clay for each soil category. Then, PLS-derived components were used as input variables for the GBDT model. The results demonstrate that the combined PLS-GBDT approach has better performance than PLS or GBDT alone. The relative important variables for soil property estimation revealed by the proposed method demonstrated that the PLS method is a useful dimension reduction tool for soil spectra to retain target-related information.

Background: Locating the root node of the \"tree of life\" (ToL) is one of the hardest problems in phylogenetics. The root-node or the universal common ancestor (UCA) divides descendants into organismal domains. Two notable variants of the two-domains ToL (2D-ToL) have gained support recently. One 2D-ToL posits that eukaryotes (organisms with nuclei) and akaryotes (organisms without nuclei) are sister clades that diverged from the UCA and that Asgard archaea are sister to other archaea, whereas the other proposes that eukaryotes emerged within archaea and places Asgard archaea sister to eukaryotes. Williams et al. ( Nature Ecol. Evol. 4: 138-147; 2020) re-evaluated the data and methods that support the competing two-domains proposals and concluded that eukaryotes are the closest relatives of Asgard archaea. Critique: We argue that important aspects of estimating evolutionary relatedness and assessing phylogenetic signal in empirical data were overlooked. We focus on phylogenetic character reconstructions necessary to describe the UCA or its closest descendants in the absence of reliable fossils. It is well known that different character types present different perspectives on evolutionary history that relate to different phylogenetic depths. Which 2D-ToL is better supported depends on which kind of molecular features - protein-domains or their component amino acids - are better for resolving common ancestors at the roots of clades. In practice, this involves reconstructing character compositions of the ancestral nodes all the way back to the UCA. We believe the criticisms of 2D-ToL focus on superficial aspects of the data and reflects common misunderstandings of phylogenetic reconstructions using protein domains (folds).   Clarifications: Models of protein domain evolution support more reliable phylogenetic reconstructions. In contrast, even the best available amino acid substitution models fail to resolve the archaeal radiation, despite employing thousands of genes. Therefore, the primary domains Eukaryotes and Akaryotes are better supported in a 2D-ToL.

Mimivirus is one of the most complex and largest viruses known. The origin and evolution of Mimivirus and other giant viruses have been a subject of intense study in the last two decades. The two prevailing hypotheses on the origin of Mimivirus and other viruses are the reduction hypothesis, which posits that viruses emerged from modern unicellular organisms; whereas the virus-first hypothesis proposes viruses as relics of precellular forms of life. In this study, to gain insights into the origin of Mimivirus, we have carried out extensive phylogenetic, correlation, and multidimensional scaling analyses of the putative proteins involved in the replication of its 1.2-Mb large genome. Correlation analysis and multidimensional scaling methods were validated using bacteriophage, bacteria, archaea, and eukaryotic replication proteins before applying to Mimivirus. We show that a large fraction of mimiviral replication proteins, including polymerase B, clamp, and clamp loaders are of eukaryotic origin and are coevolving. Although phylogenetic analysis places some components along the lineages of phage and bacteria, we show that all the replication-related genes have been homogenized and are under purifying selection. Collectively our analysis supports the idea that Mimivirus originated from a complex cellular ancestor. We hypothesize that Mimivirus has largely retained complex replication machinery reminiscent of its progenitor while losing most of the other genes related to processes such as metabolism and translation.