Misery loves company: social influence and the supply/pricing decision of a popular restaurant

In a model with social influence, Becker (1991) offers an explanation for why popular restaurants with excess demand do not raise their prices. He also offers an explanation for why such restaurants do not increase supply but admits his explanation may be weak. Becker does not provide a formal analysis of why supply is not increased. In this paper, I present a formal analysis of Becker's argument based on a different kind of social influence. I also offer an alternative explanation of why some restaurants are popular and others are not. Finally, while Becker (1991) includes market demand and the gap between market demand and supply as separate arguements in the customers' demand function to explan why supply and price are not increased. I only include the gap between demand and supply in the customers' utility function to explain both puzzles.cost of failure; excess demand; social influence

Database Queries that Explain their Work

Provenance for database queries or scientific workflows is often motivated as providing explanation, increasing understanding of the underlying data sources and processes used to compute the query, and reproducibility, the capability to recompute the results on different inputs, possibly specialized to a part of the output. Many provenance systems claim to provide such capabilities; however, most lack formal definitions or guarantees of these properties, while others provide formal guarantees only for relatively limited classes of changes. Building on recent work on provenance traces and slicing for functional programming languages, we introduce a detailed tracing model of provenance for multiset-valued Nested Relational Calculus, define trace slicing algorithms that extract subtraces needed to explain or recompute specific parts of the output, and define query slicing and differencing techniques that support explanation. We state and prove correctness properties for these techniques and present a proof-of-concept implementation in Haskell.Comment: PPDP 201

Modeling and verification of insider threats using logical analysis

In this paper we combine formal modeling and analysis of infrastructures of organisations with sociological explanation to provide a framework for insider threat analysis. We use the Higher Order Logic proof assistant Isabelle/HOL to support this framework. In the formal model, we exhibit and use a common trick from the formal verification of security protocols showing that it is applicable to insider threats. We introduce briefly a three step process of social explanation illustrating that it can be applied fruitfully to the characterisation of insider threats. We introduce the Insider theory constructed in Isabelle that implements this process of social explanation. To validate that the social explanation is generally useful for the analysis of insider threats and to demonstrate our framework, we model and verify the insider threat patterns Entitled Independent and Ambitious Leader in our Isabelle/HOL framework

Construction and Verification of Performance and Reliability Models

Over the last two decades formal methods have been extended towards performance and reliability evaluation. This paper tries to provide a rather intuitive explanation of the basic concepts and features in this area. Instead of striving for mathematical rigour, the intention is to give an illustrative introduction to the basics of stochastic models, to stochastic modelling using process algebra, and to model checking as a technique to analyse stochastic models

Modeling and verification of insider threats using logical analysis

In this paper we combine formal modeling and analysis of infrastructures of organisations with sociological explanation to provide a framework for insider threat analysis. We use the Higher Order Logic proof assistant Isabelle/HOL to support this framework. In the formal model, we exhibit and use a common trick from the formal verification of security protocols showing that it is applicable to insider threats. We introduce briefly a three step process of social explanation illustrating that it can be applied fruitfully to the characterisation of insider threats. We introduce the Insider theory constructed in Isabelle that implements this process of social explanation. To validate that the social explanation is generally useful for the analysis of insider threats and to demonstrate our framework, we model and verify the insider threat patterns Entitled Independent and Ambitious Leader in our Isabelle/HOL framework

Does the Principle of Compositionality Explain Productivity? For a Pluralist View of the Role of Formal Languages as Models

One of the main motivations for having a compositional semantics is the account of the productivity of natural languages. Formal languages are often part of the account of productivity, i.e., of how beings with finite capaci- ties are able to produce and understand a potentially infinite number of sen- tences, by offering a model of this process. This account of productivity con- sists in the generation of proofs in a formal system, that is taken to represent the way speakers grasp the meaning of an indefinite number of sentences. The informational basis is restricted to what is represented in the lexicon. This constraint is considered as a requirement for the account of productivity, or at least of an important feature of productivity, namely, that we can grasp auto- matically the meaning of a huge number of complex expressions, far beyond what can be memorized. However, empirical results in psycholinguistics, and especially particular patterns of ERP, show that the brain integrates informa- tion of different sources very fast, without any felt effort on the part of the speaker. This shows that formal procedures do not explain productivity. How- ever, formal models are still useful in the account of how we get at the seman- tic value of a complex expression, once we have the meanings of its parts, even if there is no formal explanation of how we get at those meanings. A practice-oriented view of modeling gives an adequate interpretation of this re- sult: formal compositional semantics may be a useful model for some ex- planatory purposes concerning natural languages, without being a good model for dealing with other explananda

Why Money Announcements Move Interest Rates: An Answer from the Foreign Exchange Market

On a Friday that the Fed announces a money supply greater than had been anticipated, interest rates move up in response. Why? One explanation is that the market perceives the fluctuation in the moneystock as an unintended deviation from the Fed's target growth rate that will be reversed in subsequent periods. The anticipation of this future tightening drives up interest rates today. A second explanation is that the market perceives the increase in the money supply as signalling a higher target growth rate. The expected future inflation rate rises,which is reflected in a higher nominal Interest rate.This paper offers grounds for choosing between the two possible explanations: evidence from the exchange market. Under the first explanation, anticipated future tightening, one would expect the dollar to appreciate against foreign currencies. Under the second explanation,expected inflation, one would expect it to depreciate. We render these claims more concrete by a formal model, a generalization of the Dornbusch overshooting model. Then we use the mark/dollar rate toanswer the question. We find a statistically significant tendency for the dollar to appreciate following positive money supply surprises.This supports the first explanation.

Causal Depth contra Humean Empiricism: Aspects of a Scientific Realist Approach to Explanation

The purpose of this note is to clarify how the idea of "causal depth" can play a role in finding the more "approximately true" explanation through causal comparisons. It is not an exhaustive treatment but rather focuses on a few aspects that may be the most critical in evaluating the explanatory strengths of a theory in the social sciences. It presents a general argument which is anti-Humean on the critical side and scientific realist on the positive side. It also elucidates how explanations in political economy and other social sciences can be judged by the scientific realist criterion of causal depth by an extensive example from research in the political economy of development. In this case, an "intentional" and methodologically individualist neoclassical explanation is contrasted with a "structural" dual-dual approach as rival theories purporting to explain the same set of phenomena. The formal model representing the dual-dual approach can easily be contrasted with its neoclassical counterpart. The comparison shows that the dual-dual model is indeed deeper in terms of causal structure than the neoclassical modelEconomic Models, Social Explanation,Causal Depth, Scientific Realism, Political Economy, Neoclassical Economics, Structuralism, Social Science Theories

Clearing algorithms and network centrality

I show that the solution of a standard clearing model commonly used in contagion analyses for financial systems can be expressed as a specific form of a generalized Katz centrality measure under conditions that correspond to a system-wide shock. This result provides a formal explanation for earlier empirical results which showed that Katz-type centrality measures are closely related to contagiousness. It also allows assessing the assumptions that one is making when using such centrality measures as systemic risk indicators. I conclude that these assumptions should be considered too strong and that, from a theoretical perspective, clearing models should be given preference over centrality measures in systemic risk analyses