Can Habit Formation be Reconciled with Business Cycle Facts?

Many asset pricing puzzles can be explained when habit formation is added to standard preferences. We show that utility functions with a habit then gives rise to a puzzle of consumption volatility in place of the asset pricing puzzles when agents can choose consumption and labor optimally in response to more fundamental shocks. We show that the consumption reaction to technology shocks are too small by an order of magnitude when a utility includes a habit. Alternative models with consistent and exogenous but stochastic labor input are considered. A model with persistent technology shocks and stochastic labor is shown to be potentially consistent with substantial consumption variability aswell as procyclical labor input and labor productivity even when a habit is present.

Rule of Thumb and Dynamic Programming

This paper studies the relationships between learning about rules of thumb (represented by classifier systems) and dynamic programming. Building on a result about Markovian stochastic approximation algorithms, we characterize all decision functions that can be asymptotically obtained through classifier system learning, provided the asymptotic ordering of the classifiers is strict. We demonstrate in a robust example that the learnable decision function is in general not unique, not characterized by a strict ordering of the classifiers, and may not coincide with the decision function delivered by the solution to the dynamic programming problem even if that function is attainable. As an illustration we consider the puzzle of excess sensitivity of consumption to transitory income: classifier systems can generate such behavior even if one of the available rules of thumb is the decision function solving the dynamic programming problem, since bad decisions in good times can "feel better" than good decisions in bad times.

Pitfalls in the theory of carrier dynamics in semiconductor quantum dots: the single-particle basis vs. the many-particle configuration basis

We analyze quantum dot models used in current research for misconceptions that arise from the choice of basis states for the carriers. The examined models originate from semiconductor quantum optics, but the illustrated conceptional problems are not limited to this field. We demonstrate how the choice of basis states can imply a factorization scheme that leads to an artificial dependency between two, actually independent, quantities. Furthermore, we consider an open quantum dot-cavity system and show how the dephasing, generated by the dissipator in the von Neumann Lindblad equation, depends on the choice of basis states that are used to construct the collapse operators. We find that the Rabi oscillations of the s-shell exciton are either dephased by the dissipative decay of the p-shell exciton or remain unaffected, depending on the choice of basis states. In a last step we resolve this discrepancy by taking the full system-reservoir interaction Hamiltonian into account

Modelling formation and evolution of transverse dune fields

We model formation and evolution of transverse dune fields. In the model, only the cross section of the dune is simulated. The only physical variable of relevance is the dune height, from which the dune width and velocity are determined, as well as phenomenological rules for interaction between two dunes of different heights. We find that dune fields with no sand on the ground between dunes are unstable, i.e. small dunes leave the higher ones behind. We then introduce a saturation length to simulate transverse dunes on a sand bed and show that this leads to stable dune fields with regular spacing and dune heights. Finally, we show that our model can be used to simulate coastal dune fields if a constant sand influx is considered, where the dune height increases with the distance from the beach, reaching a constant value.Comment: 18 pages including 9 figure

Superthermal photon bunching in terms of simple probability distributions

We analyze the second-order photon autocorrelation function $g^{(2)}$ with respect to the photon probability distribution and discuss the generic features of a distribution that result in superthermal photon bunching ($g^{(2)}>2$). Superthermal photon bunching has been reported for a number of optical microcavity systems that exhibit processes like superradiance or mode competition. We show that a superthermal photon number distribution cannot be constructed from the principle of maximum entropy, if only the intensity and the second-order autocorrelation are given. However, for bimodal systems an unbiased superthermal distribution can be constructed from second-order correlations and the intensities alone. Our findings suggest modeling superthermal single-mode distributions by a mixture of a thermal and a lasing like state and thus reveal a generic mechanism in the photon probability distribution responsible for creating superthermal photon bunching. We relate our general considerations to a physical system, a (single-emitter) bimodal laser, and show that its statistics can be approximated and understood within our proposed model. Furthermore the excellent agreement of the statistics of the bimodal laser and our model reveal that the bimodal laser is an ideal source of bunched photons, in the sense that it can generate statistics that contain no other features but the superthermal bunching

Jump at the onset of saltation

We reveal a discontinuous transition in the saturated flux for aeolian saltation by simulating explicitly particle motion in turbulent flow. The discontinuity is followed by a coexistence interval with two metastable solutions. The modification of the wind profile due to momentum exchange exhibits a second maximum at high shear strength. The saturated flux depends on the strength of the wind as $q_s=q_0+A(u_*-u_t)(u_*^2+u_t^2)$

The fluctuation energy balance in non-suspended fluid-mediated particle transport

Here we compare two extreme regimes of non-suspended fluid-mediated particle transport, transport in light and heavy fluids ("saltation" and "bedload", respectively), regarding their particle fluctuation energy balance. From direct numerical simulations, we surprisingly find that the ratio between collisional and fluid drag dissipation of fluctuation energy is significantly larger in saltation than in bedload, even though the contribution of interparticle collisions to transport of momentum and energy is much smaller in saltation due to the low concentration of particles in the transport layer. We conclude that the much higher frequency of high-energy particle-bed impacts ("splash") in saltation is the cause for this counter-intuitive behavior. Moreover, from a comparison of these simulations to Particle Tracking Velocimetry measurements which we performed in a wind tunnel under steady transport of fine and coarse sand, we find that turbulent fluctuations of the flow produce particle fluctuation energy at an unexpectedly high rate in saltation even under conditions for which the effects of turbulence are usually believed to be small

Minimal size of a barchan dune

Barchans are dunes of high mobility which have a crescent shape and propagate under conditions of unidirectional wind. However, sand dunes only appear above a critical size, which scales with the saturation distance of the sand flux [P. Hersen, S. Douady, and B. Andreotti, Phys. Rev. Lett. {\bf{89,}} 264301 (2002); B. Andreotti, P. Claudin, and S. Douady, Eur. Phys. J. B {\bf{28,}} 321 (2002); G. Sauermann, K. Kroy, and H. J. Herrmann, Phys. Rev. E {\bf{64,}} 31305 (2001)]. It has been suggested by P. Hersen, S. Douady, and B. Andreotti, Phys. Rev. Lett. {\bf{89,}} 264301 (2002) that this flux fetch distance is itself constant. Indeed, this could not explain the proto size of barchan dunes, which often occur in coastal areas of high litoral drift, and the scale of dunes on Mars. In the present work, we show from three dimensional calculations of sand transport that the size and the shape of the minimal barchan dune depend on the wind friction speed and the sand flux on the area between dunes in a field. Our results explain the common appearance of barchans a few tens of centimeter high which are observed along coasts. Furthermore, we find that the rate at which grains enter saltation on Mars is one order of magnitude higher than on Earth, and is relevant to correctly obtain the minimal dune size on Mars.Comment: 11 pages, 10 figure

A Primer on the Economics and Time Series Econometrics of Wealth Effects: A Comment

In a recent paper (“A Primer on the Economics and Time Series Econometrics of Wealth Effects,” 2001), Davis and Palumbo investigate the empirical relation between three cointegrated variables: aggregate consumption, asset wealth, and labor income. Although cointegration implies that an equilibrium relation ties these variables together in the long run, the authors focus on the following structural question about the short-run dynamics: “How quickly does consumption adjust to changes in income and wealth? Is the adjustment rapid, occurring within a quarter, or more sluggish, taking place over many quarters?” The authors claim that their findings answer this question, and imply that spending adjusts only gradually after gains or losses in income or wealth have been realized. We argue here, however, that a statistical methodology different from that used by Davis and Palumbo is required to address these questions, and that once it has been employed, the resulting empirical evidence weighs considerably against their interpretation of the data