We describe the results of an experiment on decision making in an insurance context. The experiment was designed to test for the underlying rationality of insurance consumers, where rationality is understood in usual economic terms. In particular, using expected utility as the preference function, we test for positive marginal utility, risk aversion, and decreasing absolute risk aversion, all of which are normal postulates for any microeconomic decision context under uncertainty or risk. We find that there the discrepancy from rational decision (...) making increases with the sophistication of the rationality criteria, that irrationality concerning fair premium contracts is uncharacteristically high, and that the slope of absolute risk aversion seems to depend on the format of the insurance contract. (shrink)
When a risk is exchanged, the exact value for the minimum price (positive or negative) that the purchaser (investor, or insurer) is willing to pay is given by the certainty equivalent wealth level, which in turn depends on his specific utility function. When this utility function is unknown, then only a sufficient condition on the price can ever be found. This paper provides methods for calculating such a sufficient condition, when only limited information on the utility function is known.
Microbial ecology is flourishing, and in the process, is making contributions to how the ecology and biology of large organisms is understood. Ongoing advances in sequencing technology and computational methods have enabled the collection and analysis of vast amounts of molecular data from diverse biological communities. While early studies focused on cataloguing microbial biodiversity in environments ranging from simple marine ecosystems to complex soil ecologies, more recent research is concerned with community functions and their dynamics over time. Models and concepts (...) from traditional ecology have been used to generate new insight into microbial communities, and novel system-level models developed to explain and predict microbial interactions. The process of moving from molecular inventories to functional understanding is complex and challenging, and never more so than when many thousands of dynamic interactions are the phenomena of interest. We outline the process of how epistemic transitions are made from producing catalogues of molecules to achieving functional and predictive insight, and show how those insights not only revolutionize what is known about biological systems but also about how to do biology itself. Examples will be drawn primarily from analyses of different human microbiota, which are the microbial consortia found in and on areas of the human body, and their associated microbiomes (the genes of those communities). Molecular knowledge of these microbiomes is transforming microbiological knowledge, as well as broader aspects of human biology, health and disease. (shrink)