Reputation Effects with Endogenous Records

A patient firm interacts with a sequence of consumers. The firm is either an honest type who supplies high quality and never erases its records, or an opportunistic type who chooses what quality to supply and may erase its records at a low cost. We show that in every equilibrium, the firm has an incentive to build a reputation for supplying high quality until its continuation value exceeds its commitment payoff, but its ex ante payoff must be close to its minmax value when it has a sufficiently long lifespan. Therefore, even a small fraction of opportunistic types can wipe out the firm's returns from building reputations. Even if the honest type can commit to reveal information about its history according to any disclosure policy, the opportunistic type's payoff cannot exceed its equilibrium payoff when the consumers receive no information

Open-world Learning and Application to Product Classification

Classic supervised learning makes the closed-world assumption, meaning that classes seen in testing must have been seen in training. However, in the dynamic world, new or unseen class examples may appear constantly. A model working in such an environment must be able to reject unseen classes (not seen or used in training). If enough data is collected for the unseen classes, the system should incrementally learn to accept/classify them. This learning paradigm is called open-world learning (OWL). Existing OWL methods all need some form of re-training to accept or include the new classes in the overall model. In this paper, we propose a meta-learning approach to the problem. Its key novelty is that it only needs to train a meta-classifier, which can then continually accept new classes when they have enough labeled data for the meta-classifier to use, and also detect/reject future unseen classes. No re-training of the meta-classifier or a new overall classifier covering all old and new classes is needed. In testing, the method only uses the examples of the seen classes (including the newly added classes) on-the-fly for classification and rejection. Experimental results demonstrate the effectiveness of the new approach.Comment: accepted by The Web Conference (WWW 2019) Previous title: Learning to Accept New Classes without Trainin

Reliability training

Discussed here is failure physics, the study of how products, hardware, software, and systems fail and what can be done about it. The intent is to impart useful information, to extend the limits of production capability, and to assist in achieving low cost reliable products. A review of reliability for the years 1940 to 2000 is given. Next, a review of mathematics is given as well as a description of what elements contribute to product failures. Basic reliability theory and the disciplines that allow us to control and eliminate failures are elucidated

Fostering the entrepreneur-opportunity nexus in entrepreneurship education - a design science approach

The doctoral thesis uses the Design Science Research approach to investigate key concepts in entrepreneurship education and subsequently develops, tests and evaluates a course design for opportunity recognition in an academic setting at the Karlsruhe Institute of Technology (KIT). Starting with a systematic literature review on entrepreneurial competences published in 2020 (Tittel and Terzidis, 2020), 57 critical entrepreneurial competences were compiled and categorized into an entrepreneurial competence framework. In addition, a conceptual definition of competence and entrepreneurial competence was developed and presented to the scientific community. A qualitative study with 26 experts, including five entrepreneurship lecturers, ten entrepreneurs, seven consultants and four company experts, was conducted to validate the list of competences identified in the recent academic literature. The interviews were analyzed based on the text and content analysis framework proposed by Mayring (2014). As a result, the experts could confirm 39 of the initial entrepreneurial competencies. In addition, 22 new competences could be identified through inductive coding of the interviews. Based on that, critical implications for developing entrepreneurial education could be developed and proposed. Both studies identified business idea generation and opportunity recognition as critical entrepreneurial competencies and highly relevant concepts for entrepreneurship. Therefore, a pedagogical intervention was developed, tested and evaluated in 12 entrepreneurship courses at the KIT. A bibliometric analysis was performed to find scientific evidence and relevant associations between Ikigai and entrepreneurship. Using the Ikigai (生き甲斐) framework, a traditional Japanese concept for "life worth living", the four key pillars (What you love, what you are good at, what the world needs, what you can be paid for) were operationalized and implemented into the pedagogical setting. The opportunity recognition course framework was then quantitatively evaluated with a structural equation model (SEM) proposed by Hair et al. (2021). As a result, the personal values-business idea fit was identified to influence the business idea’s desirability significantly. The subsequent interviews with the student teams reveal that the perceived profitability of the business idea also plays a crucial role in the perceived desirability of the business idea developed in class

Decision Theory Based Models in Insurance and Beyond

Everyday, we make difficult choices under uncertainties. The decision making process becomes even more complicated when more agents get involved: one must consider their interactions and conflicts of interest because the final outcome is based not only on an agent\u27s decision but on everybody\u27s. In insurance industry, companies try to avoid making large claim payments to policyholders (commonly known as insureds) by purchasing reinsurance policies from reinsurance companies (the reinsurer). Each policy details conditions upon which the reinsurer pays a share of the claim to the insurance company (also known as the cedent or the insurer). To reach an agreement, the interests of both parties must be taken into consideration. In this thesis, we will discuss approaches for constructing optimal reinsurance policies that are beneficial to both the insurer and the reinsurer. Likewise, we have similar situations in real estate industry, where sellers and buyers negotiate contracts. For example, the difference between the seller\u27s selling price and the buyer\u27s budget (commonly referred to as the buyer\u27s reservation price) affects the intensity of buyer arrivals, the bargaining process and its rate of success, as well as many other parameters. We will explore the likelihood of the buyer purchasing a property given factors such as the buyer\u27s reservation price and the negotiated selling prices, which may or may not be dependent random variables. Of course, these are just two illustrative scenarios that make our results more intuitive and better appreciated from the practical point of view, which has been a very important consideration throughout the thesis. Furthermore, it will be easily seen when reading the thesis that our developed and discussed methodologies can be adapted to numerous other scenarios, which may in turn require making certain adjustments to our results. Nevertheless, we are confident that the herein developed considerations are very general in nature and can already be used to facilitate decision making

Causal loops: logically consistent correlations, time travel, and computation

Causal loops are loops in cause-effect chains: An effect can be the cause of that effect's cause. We show that causal loops can be unproblematic, and explore them from different points of view. This thesis is motivated by quantum theory, general relativity, and quantum gravity. By accepting all of quantum theory one can ask whether the possibility to take superpositions extends to causal structures. Then again, quantum theory comes with conceptual problems: Can we overcome these problems by dropping causality? General relativity is consistent with space-time geometries that allow for time-travel: What happens to systems traveling along closed time-like curves, are there reasons to rule out the existence of closed time-like curves in nature? Finally, a candidate for a theory of quantum gravity is quantum theory with a different, relaxed space-time geometry. Motivated by these questions, we explore the classical world of the non-causal. This world is non-empty; and what can happen in such a world is sometimes weird, but not too crazy. What is weird is that in these worlds, a party (or event) can be in the future and in the past of some other party (time travel). What is not too crazy is that this theoretical possibility does not lead to any contradiction. Moreover, one can identify logical consistency with the existence of a unique fixed point in a cause-effect chain. This can be understood as follows: No fixed point is the same as having a contradiction (too stiff), multiple fixed points, then again, is the same as having an unspecified system (too loose). This leads to a series of results in that field: Characterization of classical non-causal correlations, closed time- like curves that do not restrict the actions of experimenters, and a self-referential model of computation. We study the computational power of this model and use it to upper bound the computational power of closed time-like curves. Time travel has ever since been term weird, what we show here, however, is that time travel is not too crazy: It is not possible to solve hard problems by traveling through time. Finally, we apply our results on causal loops to other fields: an analysis with Kolmogorov complexity, local and classical simulation of PR-box correlations with closed time-like curves, and a short note on self-referentiality in language