When Does Model-Based Control Pay Off?

Many accounts of decision making and reinforcement learning posit the existence of two distinct systems that control choice: a fast, automatic system and a slow, deliberative system. Recent research formalizes this distinction by mapping these systems to “model-free” and “model-based” strategies in reinforcement learning. Model-free strategies are computationally cheap, but sometimes inaccurate, because action values can be accessed by inspecting a look-up table constructed through trial-and-error. In contrast, model-based strategies compute action values through planning in a causal model of the environment, which is more accurate but also more cognitively demanding. It is assumed that this trade-off between accuracy and computational demand plays an important role in the arbitration between the two strategies, but we show that the hallmark task for dissociating model-free and model-based strategies, as well as several related variants, do not embody such a trade-off. We describe five factors that reduce the effectiveness of the model-based strategy on these tasks by reducing its accuracy in estimating reward outcomes and decreasing the importance of its choices. Based on these observations, we describe a version of the task that formally and empirically obtains an accuracy-demand trade-off between model-free and model-based strategies. Moreover, we show that human participants spontaneously increase their reliance on model-based control on this task, compared to the original paradigm. Our novel task and our computational analyses may prove important in subsequent empirical investigations of how humans balance accuracy and demand

Evolution at the edge of expanding populations

Predicting evolution of expanding populations is critical to control biological threats such as invasive species and cancer metastasis. Expansion is primarily driven by reproduction and dispersal, but nature abounds with examples of evolution where organisms pay a reproductive cost to disperse faster. When does selection favor this 'survival of the fastest?' We searched for a simple rule, motivated by evolution experiments where swarming bacteria evolved into an hyperswarmer mutant which disperses $\sim 100\%$ faster but pays a growth cost of $\sim 10 \%$ to make many copies of its flagellum. We analyzed a two-species model based on the Fisher equation to explain this observation: the population expansion rate ($v$) results from an interplay of growth ($r$) and dispersal ($D$) and is independent of the carrying capacity: $v=2\sqrt{rD}$. A mutant can take over the edge only if its expansion rate ($v_2$) exceeds the expansion rate of the established species ($v_1$); this simple condition ($v_2 > v_1$) determines the maximum cost in slower growth that a faster mutant can pay and still be able to take over. Numerical simulations and time-course experiments where we tracked evolution by imaging bacteria suggest that our findings are general: less favorable conditions delay but do not entirely prevent the success of the fastest. Thus, the expansion rate defines a traveling wave fitness, which could be combined with trade-offs to predict evolution of expanding populations

Organizational Differences in Managerial Compensation and Financial Performance

The present study has two general purposes. First, based on the compensation strategy literature, we examine the extent to which organizations facing similar conditions make different managerial compensation decisions regarding base pay, bonus pay, and eligibility for long-term incentives. Second, working from expectancy and agency theory perspectives, we explore the consequences of these decisions for subsequent firm performance as measured by return on assets. Using longitudinal data on approximately 16,000 top and middle level managers and 200 organizations, significant between-organization differences in compensation decisions are found. The smallest organization effects are on the level of base pay. The largest organization effects are on bonus levels and eligibility for long-term incentives. In other words, our results suggest that organizations tend to distinguish themselves through decisions about pay contingency or variability rather than through decisions about the level of base pay. To study consequences, residualized measures (adjusted for employee and job factors) of organization pay level and pay mix are used. Pay level is not associated with organization financial performance. On the other hand, greater contingency of pay in the form of bonuses and long-term incentives is associated with better financial performance

The Relationship Between Risk, Incentive Pay, and Organizational Performance

In this study we extend agency based research by examining the role of risk in the structure of managerial compensation and its relationship to organization performance. Our results suggest that organizations facing higher risk do not place greater emphasis on short term incentives, they place less emphasis on it. Also, higher risk firms which rely on incentive pay exhibited poorer performance than high risk firms which de-emphasize incentive pay

New Directions in Compensation Research: Synergies, Risk, and Survival

We describe and use two theoretical frameworks, the resource-based view of the firm and institutional theory, as lenses for examining three promising areas of compensation research. First, we examine the nature of the relationship between pay and effectiveness. Does pay typically have a main effect or, instead, does the relationship depend on other human resource activities and organization characteristics? If the latter is true, then there are synergies between pay and these other factors and thus, conclusions drawn from main effects models may be misleading. Second, we discuss a relatively neglected issue in pay research, the concept of risk as it applies to investments in pay programs. Although firms and researchers tend to focus on expected returns from compensation interventions, analysis of the risk, or variability, associated with these returns may be essential for effective decision-making. Finally ,pay program survival, which has been virtually ignored in systematic pay research, is investigated. Survival appears to have important consequences for estimating pay plan risk and returns, and is also integral to the discussion of pay synergies. Based upon our two theoretical frameworks, we suggest specific research directions for pay program synergies, risk, and survival

A Theoretical Exploration of Firms\u27 Decisions About Flexible Benefits Plans

The purpose of this paper is to examine the implications of current theories for organizations\u27 decisions about employee benefits, an area that has traditionally received little attention from researchers in the field of human resource management. Drawing on organizational and economic theories, we offer alternative explanations for observed patterns in the adoption and design of flexible benefits plans. By critically analyzing current theories in the context of flexible benefits plans, we hope to gain insights not only into the factors that may determine organizations\u27 benefits decisions, but also into the strengths and weaknesses of the theories themselves. We find that the conflicts, overlaps and limitations inherent in the theories as applied to benefits issues are substantial. The implications for future research are discussed

Employee Compensation: Research and Practice

[Excerpt] An organization has the potential to remain viable only so long as its members choose to participate and engage in necessary role behaviors (March & Simon, 1958; Katz & Kahn, 1966). To elicit these contributions, an organization must provide inducements that are of value to its members. This exchange or transaction process is at the core of the employment relationship and can be viewed as a type of contract, explicit or implicit, that imposes reciprocal obligations on the parties (Barnard, 1936; Simon, 1951; Williamson, 1975; Rousseau, 1990). At the heart of that exchange are decisions by employers and employees regarding compensation

Environmental valuation, ecosystem services and aquatic species

The thesis consists of an introduction and four articles that can be read independently of each other. The common topic is environmental valuation and cost-benefit analysis. The applications relates to the growing concern of invasive species, and to waterpower externalities. In broad terms, all of the articles relates to water management. Article 1: "A Cost-Benefit analysis of introducing a non-native species: the case of signal crayfish in Sweden", assesses the economic impact of introducing the signal crayfish into a Swedish lake. Two scenarios are set up and compared. The first one assumes that there is no introduction of signal crayfish, so that the noble crayfish is preserved. In the second scenario, the signal crayfish is introduced, which immediately wipes out the entire stock of noble crayfish. The values of noble- and signal crayfish populations are measured as present values of their net future revenues. The values are than compared and net benefit of an introduction is calculated. The result indicate that net benefit of an introduction is positive if the intrinsic growth rate or the carrying capacity of the noble crayfish is below 40 % that of the signal crayfish. Article 2: "Assessing management options for weed control with demanders and non-demanders in a choice experiment", estimates the benefits of having a weed management program for a lake in Sweden, and then compares them with corresponding costs. The policy recommendation from a simple cost-benefit rule is to control the weed at some specific sites of the lake. This paper also suggest how to distinguish those that have a positive WTP for at least one of the attributes (demanders) from those that have zero WTP for all attributes (non-demanders). The advantage of the suggested approach is that it facilitates to more clearly distinguish between conditional and unconditional willingness to pay. The suggested approach could also overcome some of the problems in the literature with negative welfare measures. Article 3: "Assessing transfer errors in the benefit transfer method: An application of invasive weed management using choice experiment", tests the accuracy of transferring benefits of a weed management program from one lake to another using choice experiment. The transfer errors are assessed and the convergent validity hypothesis is tested. Estimating the accuracy of benefit transfer for weed management is policy relevant as there are a number of lakes in Sweden infested with the water weed. The convergent validity was rejected for three out of five welfare estimates with a ten per cent significance level. Article 4: "Willingness to pay for environmental improvements in hydropower regulated rivers", assesses the benefits of environmental improvements along hydropower regulated rivers using choice experiments. Remedial measures that improve the conditions for fish, benthic invertebrates and river-margin vegetation were found to have a significant welfare increasing impact. The results can be of value for the implementation of the Water Framework Directives in Sweden, which aims to reform the use of all surface water and ground water in the member states

Teacher Labor Markets and the Perils of Using Hedonics to Estimate Compensating Differentials in the Public Sector

Assesses the difficulties of using hedonic modeling -- which assigns dollar weights to teacher- and location-specific factors to set salaries -- in determining pay differentials for public school teachers, including the lack of wage flexibility