Regression models under competing covariance matrices: A Bayesian perspective

Economics

Posterior inference on the degrees of freedom parameter in multivariate-t regression models

Economics

A Bayesian note on competing correlation structures in the dynamic linear regression model

Economics

Estimation of heterogeneous preferences, with an application to demand for internet services

This paper presents a structural econometric framework for discrete and continuous consumer choices in which unobserved intrapersonal and interpersonal preference heterogeneity is modeled explicitly. It outlines a simulation-assisted estimation methodology applicable in this framework. This methodology is illustrated in an application to analyze data from the U.C. Berkeley Internet Demand Experiment

Evidence for a Common Representation of Decision Values for Dissimilar Goods in Human Ventromedial Prefrontal Cortex

To make economic choices between goods, the brain needs to compute representations of their values. A great deal of research has been performed to determine the neural correlates of value representations in the human brain. However, it is still unknown whether there exists a region of the brain that commonly encodes decision values for different types of goods, or if, in contrast, the values of different types of goods are represented in distinct brain regions. We addressed this question by scanning subjects with functional magnetic resonance imaging while they made real purchasing decisions among different categories of goods (food, nonfood consumables, and monetary gambles). We found activity in a key brain region previously implicated in encoding goal-values: the ventromedial prefrontal cortex (vmPFC) was correlated with the subjects' value for each category of good. Moreover, we found a single area in vmPFC to be correlated with the subjects' valuations for all categories of goods. Our results provide evidence that the brain encodes a "common currency" that allows for a shared valuation for different categories of goods

The separate neural control of hand movements and contact forces

To manipulate an object, we must simultaneously control the contact forces exerted on the object and the movements of our hand. Two alternative views for manipulation have been proposed: one in which motions and contact forces are represented and controlled by separate neural processes, and one in which motions and forces are controlled jointly, by a single process. To evaluate these alternatives, we designed three tasks in which subjects maintained a specified contact force while their hand was moved by a robotic manipulandum. The prescribed contact force and hand motions were selected in each task to induce the subject to attain one of three goals: (1) exerting a regulated contact force, (2) tracking the motion of the manipulandum, and (3) attaining both force and motion goals concurrently. By comparing subjects' performances in these three tasks, we found that behavior was captured by the summed actions of two independent control systems: one applying the desired force, and the other guiding the hand along the predicted path of the manipulandum. Furthermore, the application of transcranial magnetic stimulation impulses to the posterior parietal cortex selectively disrupted the control of motion but did not affect the regulation of static contact force. Together, these findings are consistent with the view that manipulation of objects is performed by independent brain control of hand motions and interaction forces

Reappraisal of Incentives Ameliorates Choking Under Pressure and Is Correlated with Changes in the Neural Representations of Incentives

It has been observed that the pressure of performing for high stakes can, paradoxically, lead to uncharacteristically poor performance. Here we investigate a novel approach to attenuating such ‘choking under pressure’ by instructing participants performing a demanding motor task that rewards successful performance with a monetary gain, to reappraise this incentive as a monetary loss for unsuccessful performance. We show that when participants applied this simple strategy, choking was significantly reduced. This strategy also influenced participants’ neural and physiological activity. When participants reappraised the incentive as a potential monetary loss, the BOLD representation of the magnitude of the incentive in ventral striatum was attenuated. In addition, individual differences in the degree of attenuation of the neural response to incentive predicted the effectiveness of the reappraisal strategy in reducing choking. Furthermore, participants’ skin conductance changed in proportion to the magnitude of the incentive being played for, and was exaggerated on high incentive trials on which participants failed. Reappraisal of the incentive abolished this exaggerated skin conductance response. This represents the first experimental association of sympathetic arousal with choking. Taken together, these results suggest that reappraisal of the incentive is indeed a promising intervention for attenuating choking under pressure

Internationalisation, cultural distance and country characteristics: a Bayesian analysis of SME's financial performance

Relying on the accounting data of a panel of 403 Italian manufacturing SMEs collected over a period of 5 years, we find results suggesting that multinationality per se does not impact on the economic performance of international small and medium sized firms. It is the characteristics of the country selected i.e. the political hazard, the financial stability and the economic performance that significantly influence SMEs financial performance. The management implication for small and medium sized firms selecting and entering new geographic markets is significant, since our results show that for SMEs it is the market selection process that really matters and not the degree of multinationality

Neural substrates of social facilitation effects on incentive-based performance

Throughout our lives we must perform tasks while being observed by others. Previous studies have shown that the presence of an audience can cause increases in an individual’s performance as compared to when they are not being observed—a phenomenon called ‘social facilitation’. However, the neural mechanisms underlying this effect, in the context of skilled-task performance for monetary incentives, are not well understood. We used functional magnetic resonance imaging to monitor brain activity while healthy human participants performed a skilled-task during conditions in which they were paid based on their performance and observed and not observed by an audience. We found that during social facilitation, social signals represented in the dorsomedial prefrontal cortex (dmPFC) enhanced reward value computations in ventromedial prefrontal cortex (vmPFC). We also found that functional connectivity between dmPFC and ventral striatum was enhanced when participants exhibited social facilitation effects, indicative of a means by which social signals serve to modulate brain regions involved in regulating behavioral motivation. These findings illustrate how neural processing of social judgments gives rise to the enhanced motivational state that results in social facilitation of incentive-based performance

Bayesian inference with an adaptive proposal density for GARCH models

We perform the Bayesian inference of a GARCH model by the Metropolis-Hastings algorithm with an adaptive proposal density. The adaptive proposal density is assumed to be the Student's t-distribution and the distribution parameters are evaluated by using the data sampled during the simulation. We apply the method for the QGARCH model which is one of asymmetric GARCH models and make empirical studies for for Nikkei 225, DAX and Hang indexes. We find that autocorrelation times from our method are very small, thus the method is very efficient for generating uncorrelated Monte Carlo data. The results from the QGARCH model show that all the three indexes show the leverage effect, i.e. the volatility is high after negative observations