Generating ambiguity in the laboratory

This article develops a method for drawing samples from which it is impossible to infer any quantile or moment of the underlying distribution. The method provides researchers with a way to give subjects the experience of ambiguity. In any experiment, learning the distribution from experience is impossible for the subjects, essentially because it is impossible for the experimenter. We describe our method mathematically, illustrate it in simulations, and then test it in a laboratory experiment. Our technique does not withhold sampling information, does not assume that the subject is incapable of making statistical inferences, is replicable across experiments, and requires no special apparatus. We compare our method to the techniques used in related experiments that attempt to produce an ambiguous experience for the subjects.ambiguity; Ellsberg; Knightian uncertainty; laboratory experiments; ignorance; vagueness JEL Classications: C90; C91; C92; D80; D81

An Economic Alternative to the c Chart

Because the probability of Type I error is not evenly distributed beyond upper and lower three-sigma limits the c chart is theoretically inappropriate for a monitor of Poisson distributed phenomena. Furthermore, the normal approximation to the Poisson is of little use when c is small. These practical and theoretical concerns should motivate the computation of true error rates associated with individuals control assuming the Poisson distribution. An economic alternative to the c chart is described as a statistical model of upward shift from c0 to c1 and the two charts are compared in theory. For a range of c chart costs the savings associated with economic design increase linearly

MULTIVARIATE STATISTICAL PROCESS CONTROL FOR CORRELATION MATRICES

Measures of dispersion in the form of covariance control charts are the multivariate analog to the univariate R-chart, and are used in conjunction with multivariate location charts such as the Hotelling T2 chart, much as the R-chart is the companion to the univariate X-bar chart. Significantly more research has been directed towards location measures, but three multivariate statistics (|S|, Wi, and G) have been developed to measure dispersion. This research explores the correlation component of the covariance statistics and demonstrates that, in many cases, the contribution of correlation is less significant than originally believed, but also offers suggestions for how to implement a correlation control chart when this is the variable of primary interest.This research mathematically analyzes the potential use of the three covariance statistics (|S|, Wi, and G), modified for the special case of correlation. A simulation study is then performed to characterize the behavior of the two modified statistics that are found to be feasible. Parameters varied include the sample size (n), number of quality characteristics (p), the variance, and the number of correlation matrix entries that are perturbed. The performance and utility of the front-running correlation (modified Wi) statistic is then examined by comparison to similarly classed statistics and by trials with real and simulated data sets, respectively. Recommendations for the development of correlation control charts are presented, an outgrowth of which is the understanding that correlation often does not have a large effect on the dispersion measure in most cases

Affine invariant signed-rank multivariate exponentially weighted moving average control chart for process location monitoring

Multivariate statistical process control (SPC) charts for detecting possible shifts in mean vectors assume that data observation vectors follow a multivariate normal distribution. This assumption is ideal and seldom met. Nonparametric SPC charts have increasingly become viable alternatives to parametric counterparts in detecting process shifts when the underlying process output distribution is unknown, specifically when the process measurement is multivariate. This study examined a new nonparametric signed-rank multivariate exponentially weighted moving average type (SRMEWMA) control chart for monitoring location parameters. The control chart was based on adapting a multivariate spatial signed-rank test. The test was affine-invariant and the weighted version of this test was used to formulate the charting statistic by incorporating the exponentially weighted moving average (EWMA) scheme. The test\u27s in-control (IC) run length distribution was examined and the IC control limits were established for different multivariate distributions, both elliptically symmetrical and skewed. The average run length (ARL) performance of the scheme was computed using Monte Carlo simulation for select combinations of smoothing parameter, shift, and number of p-variate quality characteristics. The ARL performance was compared to the performance of the multivariate exponentially weighted moving average (MEWMA) and Hotelling T2. The control charts for observation vectors sampled the multivariate normal, multivariate t, and multivariate gamma distributions. The SRMEWMA control chart was applied to a real dataset example from aluminum smelter manufacturing that showed the SRMEWMA performed well. The newly investigated nonparametric multivariate SPC control chart for monitoring location parameters--the Signed-Rank Multivariate Exponentially Weighted Moving Average (SRMEWMA)--is a viable alternative control chart to the parametric MEWMA control chart and is sensitive to small shifts in the process location parameter. The signed-rank multivariate exponentially weighted moving average performance for data from elliptically symmetrical distributions is similar to that of the MEWMA parametric chart; however, SRMEWMA\u27s performance is superior to the performance of the MEWMA and Hotelling\u27s T2 control charts for data from skewed distributions