Regulatory reform : integrating paradigms

The Subprime crisis largely resulted from failures to internalize systemic risk evenly across financial intermediaries and recognize the implications of Knightian uncertainty and mood swings. A successful reform of prudential regulation will need to integrate more harmoniously the three paradigms of moral hazard, externalities, and uncertainty. This is a tall order because each paradigm leads to different and often inconsistent regulatory implications. Moreover, efforts to address the central problem under one paradigm can make the problems under the others worse. To avoid regulatory arbitrage and ensure that externalities are uniformly internalized, all prudentially regulated intermediaries should be subjected to the same capital adequacy requirements, and unregulated intermediaries should be financed only by regulated intermediaries. Reflecting the importance of uncertainty, the new regulatory architecture will also need to rely less on markets and more on"holistic"supervision, and incorporate countercyclical norms that can be adjusted in light of changing circumstances.Debt Markets,Banks&Banking Reform,Emerging Markets,Labor Policies,Financial Intermediation

Life is an Adventure! An agent-based reconciliation of narrative and scientific worldviews\ud

The scientific worldview is based on laws, which are supposed to be certain, objective, and independent of time and context. The narrative worldview found in literature, myth and religion, is based on stories, which relate the events experienced by a subject in a particular context with an uncertain outcome. This paper argues that the concept of “agent”, supported by the theories of evolution, cybernetics and complex adaptive systems, allows us to reconcile scientific and narrative perspectives. An agent follows a course of action through its environment with the aim of maximizing its fitness. Navigation along that course combines the strategies of regulation, exploitation and exploration, but needs to cope with often-unforeseen diversions. These can be positive (affordances, opportunities), negative (disturbances, dangers) or neutral (surprises). The resulting sequence of encounters and actions can be conceptualized as an adventure. Thus, the agent appears to play the role of the hero in a tale of challenge and mystery that is very similar to the "monomyth", the basic storyline that underlies all myths and fairy tales according to Campbell [1949]. This narrative dynamics is driven forward in particular by the alternation between prospect (the ability to foresee diversions) and mystery (the possibility of achieving an as yet absent prospect), two aspects of the environment that are particularly attractive to agents. This dynamics generalizes the scientific notion of a deterministic trajectory by introducing a variable “horizon of knowability”: the agent is never fully certain of its further course, but can anticipate depending on its degree of prospect

Do (and say) as I say: Linguistic adaptation in human-computer dialogs

© Theodora Koulouri, Stanislao Lauria, and Robert D. Macredie. This article has been made available through the Brunel Open Access Publishing Fund.There is strong research evidence showing that people naturally align to each other’s vocabulary, sentence structure, and acoustic features in dialog, yet little is known about how the alignment mechanism operates in the interaction between users and computer systems let alone how it may be exploited to improve the efficiency of the interaction. This article provides an account of lexical alignment in human–computer dialogs, based on empirical data collected in a simulated human–computer interaction scenario. The results indicate that alignment is present, resulting in the gradual reduction and stabilization of the vocabulary-in-use, and that it is also reciprocal. Further, the results suggest that when system and user errors occur, the development of alignment is temporarily disrupted and users tend to introduce novel words to the dialog. The results also indicate that alignment in human–computer interaction may have a strong strategic component and is used as a resource to compensate for less optimal (visually impoverished) interaction conditions. Moreover, lower alignment is associated with less successful interaction, as measured by user perceptions. The article distills the results of the study into design recommendations for human–computer dialog systems and uses them to outline a model of dialog management that supports and exploits alignment through mechanisms for in-use adaptation of the system’s grammar and lexicon

Making Multimodal Generation Easier: When Diffusion Models Meet LLMs

We present EasyGen, an efficient model designed to enhance multimodal understanding and generation by harnessing the capabilities of diffusion models and large language models (LLMs). Unlike existing multimodal models that predominately depend on encoders like CLIP or ImageBind and need ample amounts of training data to bridge the gap between modalities, EasyGen is built upon a bidirectional conditional diffusion model named BiDiffuser, which promotes more efficient interactions between modalities. EasyGen handles image-to-text generation by integrating BiDiffuser and an LLM via a simple projection layer. Unlike most existing multimodal models that are limited to generating text responses, EasyGen can also facilitate text-to-image generation by leveraging the LLM to create textual descriptions, which can be interpreted by BiDiffuser to generate appropriate visual responses. Extensive quantitative and qualitative experiments demonstrate the effectiveness of EasyGen, whose training can be easily achieved in a lab setting. The source code is available at https://github.com/zxy556677/EasyGen