Learning approximate diagnosis

Model-based diagnosis (MBD) provides several advantages over experiential rule-based systems. A principal shortcoming of MBD is that MBD learns nothing from any given example. An MBD system facing the same task a second time will incur the same computational effort as that incurred the first time. Our earlier work on incorporating explanation-based learning (EBL) in MBD [4] suggested a diagnostic architecture integrating EBL and MBD components. In this architecture, EBL was used to learn diagnostic rules. But the diagnoses proposed by the rules could be erroneous. So constraint suspension testing was used to check all proposed diagnoses. Insisting on perfect accuracy causes the performance of this scheme for "learning while doing" to deteriorate rapidly with the size of the device to be diagnosed. In this paper, we describe a method for trading off accuracy for efficiency. In this approach, most diagnosis problems are handled by the associational rules learned from previous problems. Model-based reasoning and learning are activated only when performance drops below a given threshold. We present empirical results on circuits of increasing number of components illustrating how this approach scales up

Learning multiple fault diagnosis

This paper describes two methods for integrating model-based diagnosis (MBD) and explanation-based learning. The first method (EBL) uses a generate-test-debug paradigm, generating diagnostic hypotheses using learned associational rules that summarize model-based diagnostic experiences. This strategy is a form of "learning while doing" model-based troubleshooting and could be called "online learning." The second diagnosis and learning method described here (EEL-STATIC) involves ''learning in advance." Learning begins in a training phase prior to performance or testing. Empirical results of computational experiments comparing the learning methods with MBD on two devices (the polybox and the binary full adder) are reported. For the same diagnostic performance, EBL-STATIC is several orders of magnitude faster than MBD while EBL can cause performance slow-down

Explanation-based learning for diagnosis

Diagnostic expert systems constructed using traditional knowledge-engineering techniques identify malfunctioning components using rules that associate symptoms with diagnoses. Model-based diagnosis (MBD) systems use models of devices to find faults given observations of abnormal behavior. These approaches to diagnosis are complementary. We consider hybrid diagnosis systems that include both associational and model-based diagnostic components. We present results on explanation-based learning (EBL) methods aimed at improving the performance of hybrid diagnostic problem solvers. We describe two architectures called EBL_IA and EBL(p). EBL_IA is a form fo "learning in advance" that pre-compiles models into associations. At run-time the diagnostic system is purely associational. In EBL(p), the run-time diagnosis system contains associational, MBD, and EBL components. Learned associational rules are preferred but when they are incomplete they may produce too many incorrect diagnoses. When errors cause performance to dip below a give threshold p, EBL(p) activates MBD and explanation-based "learning while doing". We present results of empirical studies comparing MBD without learning versus EBL_IA and EBL(p). The main conclusions are as follows. EBL_IA is superior when it is feasible but it is not feasible for large devices. EBL(p) can speed-up MBD and scale-up to larger devices in situations where perfect accuracy is not required

A qualitative logic of decision

An important aspect of intelligent behavior is the ability to reason, make decisions, and act in spite of uncertainty. This paper presents a qualitative logic of decision that supports decision-making under uncertainty. To be specific, the paper presents a knowledge representation language based upon subjective Bayesian decision theory that aims to capture some aspects of common-sense reasoning associated with making decisions about actions. The language addresses the problem of describing justifications of rational choices in situations where the alternatives involve trading off potential losses and gains. The logic and an associated qualitative arithmetic are implemented in an efficient PROLOG program. Examples illustrate their use in several concrete decision-making situations

Entrepreneurship, Spillovers and Productivity Growth in the Small Firm Sector of UK Manufacturing

This paper considers the sources of technological change and productivity growth in the small firm sector of UK manufacturing over the period 1973- 2002, focusing on the mechanisms by which spillovers occur between the large firms which perform the bulk of R&D and smaller firms which are the recipients. It is argued that the current volume of domestic R&D generates profitable and high productivity opportunities for smaller firms. However this mechanism ignores the ways in which R&D also contributes to the more general knowledge base available to small firms as codified information which frequently takes the measurable form of industrial standards. A simple model of labour demand among small manufacturing is developed which employs two measures of technological activity intended to capture both these channels. A co-integrating relationship based upon an augmented labour demand equation is established for UK manufacturing, showing the relevance of both channels for the explanation of productivity growth in the small firm sector.Key Words: Small firms; productivity; technological change; R&D; standards.

Tracking Error and Active Portfolio Management

Persistent bear market conditions have led to a shift of focus in the tracking error literature. Until recently the portfolio allocation literature focused on tracking error minimization as a consequence of passive benckmark management under portfolio weights, transaction costs and short selling constraints. Abysmal benchmark performance shifted the literature's focus towards active portfolio strategies that aim at beating the benchmark while keeping tracking error within acceptable bounds. We investigate an active (dynamic) portfolio allocation strategy that exploits the predictability in the conditional variance-covariance matrix of asset returns. To illustrate our procedure we use Jorion's (2002) tracking error frontier methodology. We apply our model to a representative portfolio of Australian stocks over the period January 1999 through November 2002.