Anticipation and Risk – From the inverse problem to reverse computation

Abstract. Risk assessment is relevant only if it has predictive relevance. In this sense, the anticipatory perspective has yet to contribute to more adequate predictions. For purely physics-based phenomena, predictions are as good as the science describing such phenomena. For the dynamics of the living, the physics of the matter making up the living is only a partial description of their change over time. The space of possibilities is the missing component, complementary to physics and its associated predictions based on probabilistic methods. The inverse modeling problem, and moreover the reverse computation model guide anticipatory-based predictive methodologies. An experimental setting for the quantification of anticipation is advanced and structural measurement is suggested as a possible mathematics for anticipation-based risk assessment

Nataly Aguirre - Stress, Risk, and Reward in Financial Decision-Making: The Roles of Probability and Magnitude

Considerable research suggests acute stress influences decision-making. There has, however, been a lack of research examining the possibility that separable components of the stress response may influence decision-making differently: the sympatho-adrenomedullary (SAM) and hypothalamic-pituitary-adrenal (HPA) axes. In the current pilot study, participants engaged in a gambling task where they made choices between decisions of varied probability and magnitude for potential gains of money after being exposed to acute stress (via a variant of the cold pressor task). Further, the timing of the stressor was varied to allow examination of SAM and HPA effects separately. Cortisol and skin conductance were measured. Given the task was in the gain frame only, in support of past research on framing results indicated that individuals made significantly more conservative or risk-averse choices in the gambling. Further, risk-taking scaled to the expected value of a decision. Males made more risk-seeking choices as compared to females. Divergent from the original hypothesis, however, stress of neither type had an effect on individuals’ risk-taking overall, nor as a function of probability or magnitude. This suggests that decisions framed as potential gains may not be influenced by stress as readily as decisions framed as potential losses, and that stress may not alter how people perceive the probability or magnitude associated with a decision. Methodological flaws highlighted by the pilot study which may have contributed to the lack of a stress effect will also be discussed.https://epublications.marquette.edu/mcnair_2013/1000/thumbnail.jp

Ramsey monetary policy and international relative prices

We analyze welfare maximizing monetary policy in a dynamic two-country model with price stickiness and imperfect competition. In this context, a typical terms of trade externality affects policy interaction between independent monetary authorities. Unlike the existing literature, we remain consistent to a public finance approach by an explicit consideration of all the distortions that are relevant to the Ramsey planner. This strategy entails two main advantages. First, it allows an accurate characterization of optimal policy in an economy that evolves around a steady-state which is not necessarily efficient. Second, it allows to describe a full range of alternative dynamic equilibria when price setters in both countries are completely forward-looking and households' preferences are not restricted. In this context, we study optimal policy both in the long-run and along a dynamic path, and we compare optimal commitment policy under Nash competition and under cooperation. By deriving a second order accurate solution to the policy functions, we also characterize the welfare gains from international policy cooperation. Klassifikation: E52, F41 . This version: January, 2004. First draft: October 2003

Asset pricing models, the labour theory of value and their implications for accounting

The paper analyses the social components of two theories of central importance to accounting and finance. It shows that modern finance theory is unable to account for value and that although its canon and major assumptions successfully obfuscate real social relations, they do not provide an alternative explanation of those relations. The paper also argues that although Marx’s Capital uses accounting formulations to analyse capitalism, it does not provide a means of advancing accounting theory per se. In the spirit of further extending the analytical approach, Marx’s method is developed to include managerial and labour rents and the socialisation of capital, which when coupled with analytical techniques of modern finance and accounting, provides a basis for the critical analysis of capitalism. The paper shows that, by analysing the dialectical inter-relation of the means of production with the social relations of production, Marx’s method can be extended to provide an understanding of several important aspects capitalism

A tight linear bound on the synchronization delay of bijective automata

AbstractReversible cellular automata (RCA) are models of massively parallel computation that preserve information. We generalize these systems by introducing the class of ωωbijective finite automata. It consists of those finite automata where for any bi-infinite word there exists a unique path labelled by that word. These systems are strictly included in the class of local automata. Although the synchronization delay of an n-state local automaton is known to be Θ(n2) in the worst case, we prove that in the case of ωωbijective finite automata the synchronization delay is at most n−1. Based on this we prove that for a one-dimensional n-state RCA where the neighborhood consists of m consecutive cells, the neighbourhood of the inverse automaton consists of at most nm−1−(m−1) cells. Similar bounds are obtained also in [E. Czeizler, J. Kari, A tight linear bound on the neighborhood of inverse cellular automata, in: Proceedings of ICALP 2005, in: LNCS, vol. 3580, 2005, pp. 410–420] but here the result comes as a direct consequence of the more general result. We also construct examples of RCA with large inverse neighbourhoods proving that the upper bounds provided here are the best possible in the case m=2