Detecting and Forecasting Economic Regimes in Multi-Agent Automated Exchanges

We show how an autonomous agent can use observable market conditions to characterize the microeconomic situation of the market and predict future market trends. The agent can use this information to make both tactical decisions, such as pricing, and strategic decisions, such as product mix and production planning. We develop methods to learn dominant market conditions, such as over-supply or scarcity, from historical data using Gaussian mixture models to construct price density functions. We discuss how this model can be combined with real-time observable information to identify the current dominant market condition and to forecast market changes over a planning horizon. We forecast market changes via both a Markov correction-prediction process and an exponential smoother. Empirical analysis shows that the exponential smoother yields more accurate predictions for the current and the next day (supporting tactical decisions), while the Markov correction-prediction process is better for longer term predictions (supporting strategic decisions). Our approach offers more flexibility than traditional regression based approaches, since it does not assume a fixed functional relationship between dependent and independent variables. We validate our methods by presenting experimental results in a case study, the Trading Agent Competition for Supply Chain Management

Tactical and Strategic Sales Management for Intelligent Agents Guided By Economic Regimes

We present a computational approach that autonomous software agents can adopt to make tactical decisions, such as product pricing, and strategic decisions, such as product mix and production planning, to maximize profit in markets with supply and demand uncertainties. Using a combination of machine learning and optimization techniques, the agent is able to characterize economic regimes, which are historical microeconomic conditions reflecting situations such as over-supply and scarcity. We assume an agent is capable of using real-time observable information to identify the current dominant market condition and we show how it can forecast regime changes over a planning horizon. We demonstrate how the agent can then use regime characterization to predict prices, price trends, and the probability of receiving a customer order in a dynamic supply chain environment. We validate our methods by presenting experimental results from a testbed derived from the Trading Agent Competition for Supply Chain Management (TAC SCM). The results show that our agent outperforms traditional short- and long-term predictive methodologies (such as exponential smoothing) significantly, resulting in accurate prediction of customer order probabilities, and competitive market prices. This, in turn, has the potential to produce higher profits. We also demonstrate the versatility of our computational approach by applying the methodology to prediction of stock price trends

Real-time Tactical and Strategic Sales Management for Intelligent Agents Guided By Economic Regimes

Many enterprises that participate in dynamic markets need to make product pricing and inventory resource utilization decisions in real-time. We describe a family of statistical models that address these needs by combining characterization of the economic environment with the ability to predict future economic conditions to make tactical (short-term) decisions, such as product pricing, and strategic (long-term) decisions, such as level of finished goods inventories. Our models characterize economic conditions, called economic regimes, in the form of recurrent statistical patterns that have clear qualitative interpretations. We show how these models can be used to predict prices, price trends, and the probability of receiving a customer order at a given price. These “regime” models are developed using statistical analysis of historical data, and are used in real-time to characterize observed market conditions and predict the evolution of market conditions over multiple time scales. We evaluate our models using a testbed derived from the Trading Agent Competition for Supply Chain Management (TAC SCM), a supply chain environment characterized by competitive procurement and sales markets, and dynamic pricing. We show how regime models can be used to inform both short-term pricing decisions and longterm resource allocation decisions. Results show that our method outperforms more traditional shortand long-term predictive modeling approaches

Combining Path Integration and Remembered Landmarks When Navigating without Vision

This study investigated the interaction between remembered landmark and path integration strategies for estimating current location when walking in an environment without vision. We asked whether observers navigating without vision only rely on path integration information to judge their location, or whether remembered landmarks also influence judgments. Participants estimated their location in a hallway after viewing a target (remembered landmark cue) and then walking blindfolded to the same or a conflicting location (path integration cue). We found that participants averaged remembered landmark and path integration information when they judged that both sources provided congruent information about location, which resulted in more precise estimates compared to estimates made with only path integration. In conclusion, humans integrate remembered landmarks and path integration in a gated fashion, dependent on the congruency of the information. Humans can flexibly combine information about remembered landmarks with path integration cues while navigating without visual information.National Institutes of Health (U.S.) (Grant T32 HD007151)National Institutes of Health (U.S.) (Grant T32 EY07133)National Institutes of Health (U.S.) (Grant F32EY019622)National Institutes of Health (U.S.) (Grant EY02857)National Institutes of Health (U.S.) (Grant EY017835-01)National Institutes of Health (U.S.) (Grant EY015616-03)United States. Department of Education (H133A011903

Structure Learning in Human Sequential Decision-Making

Studies of sequential decision-making in humans frequently find suboptimal performance relative to an ideal actor that has perfect knowledge of the model of how rewards and events are generated in the environment. Rather than being suboptimal, we argue that the learning problem humans face is more complex, in that it also involves learning the structure of reward generation in the environment. We formulate the problem of structure learning in sequential decision tasks using Bayesian reinforcement learning, and show that learning the generative model for rewards qualitatively changes the behavior of an optimal learning agent. To test whether people exhibit structure learning, we performed experiments involving a mixture of one-armed and two-armed bandit reward models, where structure learning produces many of the qualitative behaviors deemed suboptimal in previous studies. Our results demonstrate humans can perform structure learning in a near-optimal manner

Grasping Objects with Environmentally Induced Position Uncertainty

Due to noisy motor commands and imprecise and ambiguous sensory information, there is often substantial uncertainty about the relative location between our body and objects in the environment. Little is known about how well people manage and compensate for this uncertainty in purposive movement tasks like grasping. Grasping objects requires reach trajectories to generate object-fingers contacts that permit stable lifting. For objects with position uncertainty, some trajectories are more efficient than others in terms of the probability of producing stable grasps. We hypothesize that people attempt to generate efficient grasp trajectories that produce stable grasps at first contact without requiring post-contact adjustments. We tested this hypothesis by comparing human uncertainty compensation in grasping objects against optimal predictions. Participants grasped and lifted a cylindrical object with position uncertainty, introduced by moving the cylinder with a robotic arm over a sequence of 5 positions sampled from a strongly oriented 2D Gaussian distribution. Preceding each reach, vision of the object was removed for the remainder of the trial and the cylinder was moved one additional time. In accord with optimal predictions, we found that people compensate by aligning the approach direction with covariance angle to maintain grasp efficiency. This compensation results in higher probability to achieve stable grasps at first contact than non-compensation strategies in grasping objects with directional position uncertainty, and the results provide the first demonstration that humans compensate for uncertainty in a complex purposive task

Local Velocity Representation: Evidence From Motion Adaptation

Adaptation to a moving visual pattern induces shifts in the perceived motion of subsequently viewed moving patterns. Explanations of such effects are typically based on adaptation-induced sensitivity changes in spatio-temporal frequency tuned mechanisms (STFMs). An alternative hypothesis is that adaptation occurs in mechanisms that independently encode direction and speed (DSMs). Yet a third possibility is that adaptation occurrs in mechanisms that encode 2D pattern velocity (VMs). We performed a series of psychophysical experiments to examine predictions made by each of the three hypotheses. The results indicate that: (1) adaptation-induced shifts are relatively independent of spatial pattern of both adapting and test stimuli; (2) the shift in perceived direction of motion of a plaid stimulus after adaptation to a grating indicates a shift in the motion of the plaid pattern, and not a shift in the motion of the plaid components; and (3) the 2D pattern of shift in perceived velocity ra..