Ethical issues in modeling: Some reflections

Ethics are involved in a model’s purposes (for example, the purpose might be to increase a heroin dealer’s profits). These purposes imply consideration of the various stakeholders (modelers, users, public) and their values. Ethics also concern professional standards of conduct for the modelers. These standards require that the modelers validate the model assumptions. Hence, modelers should provide model documentation. Validation, however, is virtually impossible when the model represents unique events, such as nuclear accidents; credibility is then the maximum attainable. Anyhow, modelers should try to develop ‘robust’ models; that is, models that are not very sensitive to their assumptions. This article pays special attention to the use of models in crime, war, and nuclear applications, which might be controversial applications indeed. It also discusses freedom of science. Hopefully, this article will stimulate further discussion in the academic community!     

The rise of complex phenomena in Cournot duopoly games due to demand functions without inflection points

In this paper, we propose Cournot duopoly games where quantity-setting firms use non-linear demand functions that have no inflection points. Two different kinds of repeated games are introduced based on rationality process of firms and Puu’s incomplete approach. First, a model of two rational firms that are in competition and produce homogenous commodities is introduced. The equilibrium points of this model are obtained and their dynamical characteristics such as stability, bifurcation and chaos are investigated. By using rationality process firms do not need to solve any optimization problem but they adjust their production based on estimation of the marginal profit. Using Puu’s incomplete information approach a new model is introduced. As in the first model, the equilibrium points are obtained and their dynamical characteristics are investigated. By using Puu’s approach firms only need to know their profits and the quantities produced in the past two times. We compare the properties of the two models under the two approaches. The paper extends and generalizes the results of other authors that consider similar processes.     

Simple discrete-time malarial models

We investigate dynamics of mosquito population models under two assumptions, respectively, and then formulate simple discrete-time compartmental susceptible-exposed-infective-recovered models for the malaria transmission based on the mosquito population models. We show that the mosquito population models either have robust dynamics or exhibit period-doubling bifurcation depending on the model assumptions. We derive a formula for the reproductive number of infection for the malaria model, which determines the stability of the infection-free fixed point. We then determine the existence of endemic fixed points for the malaria models. Using numerical simulations, we demonstrate that the dynamical characteristics of the mosquito populations, such as the global stability of the endemic fixed point and the appearance of a period-doubling bifurcation, are reflected in the dynamics of the malaria transmission.     

Ultrametric model of mind,I: Review

We mathematically model Ignacio Matte Blanco’s principles of symmetric and asymmetric being through use of an ultrametric topology. We use for this the highly regarded 1975 book of this Chilean psychiatrist and pyschoanalyst (born 1908, died 1995). Such an ultrametric model corresponds to hierarchical clustering in the empirical data, e.g. text. We show how an ultrametric topology can be used as a mathematical model for the structure of the logic that reflects or expresses Matte Blanco’s symmetric being, and hence of the reasoning and thought processes involved in conscious reasoning or in reasoning that is lacking, perhaps entirely, in consciousness or awareness of itself. In a companion paper we study how symmetric (in the sense of Matte Blanco’s) reasoning can be demarcated in a context of symmetric and asymmetric reasoning provided by narrative text.     

A note on some joint distribution functions involving the time of ruin

In a recent paper, Willmot (2015) derived an expression for the joint distribution function of the time of ruin and the deficit at ruin in the classical risk model. We show how his approach can be applied to obtain a simpler expression, and by interpreting this expression by probabilistic reasoning we obtain solutions for more general risk models. We also discuss how some of Willmot’s results relate to existing literature on the probability and severity of ruin.     

On the Performance of Managers and Controllers: A Polymatrix Game Approach for the Manager–Controller–Board of Directors’ Conflict

In this article, we focus on the conflict among the manager, the controller and the board of directors of a company. We model the problem as a three-player polymatrix game. Under a set of assumptions, we identify five potential Nash equilibria. We prove that the Nash equilibrium is unique, despite its changing structure. Next, we analyze the influence of the manager’s and controller’s bonuses and penalties on the Nash equilibria. Finally, we explain how the manager and the controller may decrease or maintain their performance, when their bonuses or penalties increase.     

Evaluating credal classifiers by utility-discounted predictive accuracy

Predictions made by imprecise-probability models are often indeterminate (that is, set-valued). Measuring the quality of an indeterminate prediction by a single number is important to fairly compare different models, but a principled approach to this problem is currently missing. In this paper we derive, from a set of assumptions, a metric to evaluate the predictions of credal classifiers. These are supervised learning models that issue set-valued predictions. The metric turns out to be made of an objective component, and another that is related to the decision-maker’s degree of risk aversion to the variability of predictions. We discuss when the measure can be rendered independent of such a degree, and provide insights as to how the comparison of classifiers based on the new measure changes with the number of predictions to be made. Finally, we make extensive empirical tests of credal, as well as precise, classifiers by using the new metric. This shows the practical usefulness of the metric, while yielding a first insightful and extensive comparison of credal classifiers.     

Bayesian MAP model selection of chain event graphs

Chain event graphs are graphical models that while retaining most of the structural advantages of Bayesian networks for model interrogation, propagation and learning, more naturally encode asymmetric state spaces and the order in which events happen than Bayesian networks do. In addition, the class of models that can be represented by chain event graphs for a finite set of discrete variables is a strict superset of the class that can be described by Bayesian networks. In this paper we demonstrate how with complete sampling, conjugate closed form model selection based on product Dirichlet priors is possible, and prove that suitable homogeneity assumptions characterise the product Dirichlet prior on this class of models. We demonstrate our techniques using two educational examples.     

VIABILITY MODEL OF TROPHIC INTERACTIONS IN MARINE ECOSYSTEMS

ABSTRACT. An attempt to use viability models for studying marine ecosystems is proposed as a possible alternative to classical ecosystem modeling. Viability models do not consider optimal solutions but instead define all possible evolutions of a dynamical system under given constraints. Applied to marine ecosystems, a viability model is formulated based on the trophic coefficients of a mass‐balanced model. This requires relatively few assumptions about the processes involved and can integrate uncertainty associated with the required estimates of input parameters. An iterative algorithm is proposed to calculate the viability kernel, i.e., the envelope of all viable trajectories of the ecosystem. An application to the Benguela ecosystem is presented, considering interactions between detritus, phytoplankton, zooplankton, pelagic fish, demersal fish and fisheries. Results show how a viability kernel could be used to better define the healthy states of a marine ecosystem, by defining what states should be avoided. The paper discusses how viability models of trophic interactions could help to define a new ecosystem‐based indicator for fisheries management. It then discusses how this approach can potentially contribute to a paradigm shift that is emerging in the management of renewable resources.     

CHILDREN'S PROPORTIONAL REASONING AND TENDENCY FOR AN ADDITIVE STRATEGY: THE ROLE OF MODELS

In this paper we report on 10 –14 year old children's strategies while solving two versions of ratio and proportion tasks: one ‘with models’ thought to facilitate proportional reasoning and one ‘without’. Rasch methodology was used to develop ‘with’ and ‘without models’ test versions which were given to a linked sample involving 673 children. We examine the pupils’ additive errors, their effect on ratio reasoning and how contingent on ‘model’ presentation this is. First, we provide a single scale on which pupils, item-difficulty and additive errors can be located. We then provide a new scale constructed from the error prone items, which we name the ‘tendency for additive strategy’. The measurement data is supported by qualitative data showing that the presence of ‘models’ can sometimes affect children's strategies, both positively and negatively but rarely makes a significant measurement difference on this, untutored, sample.     

Dynamical analysis of a nonlinear competitive model with generic and brand advertising efforts

In this paper, a new four-dimensional map is proposed to model the dynamical advertising efforts, where both the generic and brand effects for advertisement are taken into account in the model. The marginal profit adapting strategy is used to reflect the interaction among the firms that strive for the optimal profit. When the generic advertising bears a large effectiveness coefficient, the generic advertising efforts will exhibit chaos, which leads to a chaotic dynamics for brand advertising efforts. In this case, we analyze the some properties of steady trajectories that imply rough profiles of the advertising strategies evolution. Furthermore, by rigorous dynamical analysis and numerical simulations, we obtain the feasible set outlining the influence of initial conditions on the global dynamic properties. We first deal with the symmetric system, and then extend the obtained results to more general case, namely, the asymmetric model. For the symmetric model, two firms’ brand advertising expenditures behave synchronization, but the dynamics of generic advertising efforts are dependent upon initial conditions. Meanwhile, for the heterogeneous case, the domain firm in the market needs to contribute all generic advertising expenditures. Our results can have a practical impact on the market evolution, and are therefore beneficial to decision maker.     

Zu Kepplers Conchoid-Konstruktion

The physical models introduced by Johannes Keppler into astronomy were not only much more accurate than their predecessors, they were innovative theoretically to such an extent that they stand quite alone. The conchoid construction he presented in his ”Astronomia Nova” (1609) seems to have almost escaped notice in the literature. A misguided and sometimes unwitting interpretation of Keppler’s physical astronomy as a precursor to Newton’s celestial mechanics has impeded any fair analysis of it. Keppler’s physics is a physics of phases and frequencies, as Newton’s is a physics of accelerations. The purpose of this paper is to outline the impact of Keppler’s conchoid construction. His dynamical approach which is a profoundly original filter bank construction has found recently an unexpected revelation in magnetic resonance tomography.     

Initial conditions estimation for improving forecast accuracy in exponential smoothing

In this paper we analyze the importance of initial conditions in exponential smoothing models on forecast errors and prediction intervals. We work with certain exponential smoothing models, namely Holt’s additive linear and Gardner’s damped trend. We study some probability properties of those models, showing the influence of the initial conditions on the forecast, which highlights the importance of obtaining accurate estimates of initial conditions. Using the linear heteroscedastic modeling approach, we show how to obtain the joint estimation of initial conditions and smoothing parameters through maximum likelihood via box-constrained nonlinear optimization. Point-wise forecasts of future values and prediction intervals are computed under normality assumptions on the stochastic component. We also propose an alternative formulation of prediction intervals in order to obtain an empirical coverage closer to their nominal values; that formulation adds an additional term to the standard formulas for the estimation of the error variance. We illustrate the proposed approach by using the yearly data time-series from the M3-Competition.     

Household risk aversion and portfolio choices

In practice, stock investment is one of the most important decisions made by households. The primary goal of this paper is to explain family investment decisions under the assumptions of household member’s preferences and efficient risk sharing based on the collective household model. In particular, by examining the absolute (relative) risk aversion of the household welfare function, we demonstrate how household’s portfolio allocation in stocks changes with family wealth. We examine two types of preference heterogeneity between family members: parameter heterogeneity and functional form heterogeneity. This study offers an alternative explanation of household portfolio choice corresponding with the observation that wealthier households tend to hold greater share of their wealth in risky assets. Specifically, if two decision-makers have standard constant relative risk aversion preference with different relative risk aversions in a household, family’s relative risk aversion decreases as household wealth increases (decreasing relative risk aversion).     

Dynamical symmetries and temporal segmentation

Summary Segmentation of a mixed input into recognizable patterns is a task that is common to many perceptual functions. It can be realized in neural models through temporal segmentation: formation of staggered oscillations such that within each period every nonlinear oscillator peaks once and is dominant for a short while. We investigate such behavior in a symmetric dynamical system. The fully segmented mode is one type of limit cycle that this system can exhibit. We discuss its symmetry classification and its dynamical characterization. We observe that it can be sustained for only a small number of segments and relate this fact to a limitation on the appearance of narrow subharmonic oscillations in our system.     

RiskMetrics模型评估与扩展

RiskMetrics是当今最为流行的风险度量模型,然而其基础假设-标准化收益服从正态分布,却备受置疑.放宽此假设,以更灵活的t分布,广义误差分布,混合正态分布,Johnson Su-正态,Pearson IV分布代替,建立了五种扩展的RiskMetrics模型.我们用沪深股市日收益数据进行实证比较分析,回测结果表明,扩展模型明显优于标准模型,而基于非对称分布假设的模型优于基于对称分布的模型.     

Blocking and invasion for reaction–diffusion equations in periodic media

We investigate the large time behavior of solutions of reaction–diffusion equations with general reaction terms in periodic media. We first derive some conditions which guarantee that solutions with compactly supported initial data invade the domain. In particular, we relate such solutions with front-like solutions such as pulsating traveling fronts. Next, we focus on the homogeneous bistable equation set in a domain with periodic holes, and specifically on the cases where fronts are not known to exist. We show how the geometry of the domain can block or allow invasion. We finally exhibit a periodic domain on which the propagation takes place in an asymmetric fashion, in the sense that the invasion occurs in a direction but is blocked in the opposite one.     

Pareto-optimal reinsurance arrangements under general model settings

In this paper, we study Pareto optimality of reinsurance arrangements under general model settings. We give the necessary and sufficient conditions for a reinsurance contract to be Pareto-optimal and characterize all Pareto-optimal reinsurance contracts under more general model assumptions. We also obtain the sufficient conditions that guarantee the existence of the Pareto-optimal reinsurance contracts. When the losses of an insurer and a reinsurer are both measured by the Tail-Value-at-Risk (TVaR) risk measures, we obtain the explicit forms of the Pareto-optimal reinsurance contracts under the expected value premium principle. For the purpose of practice, we use numerical examples to show how to determine the mutually acceptable Pareto-optimal reinsurance contracts among the available Pareto-optimal reinsurance contracts such that both the insurer’s aim and the reinsurer’s goal can be met under the mutually acceptable Pareto-optimal reinsurance contracts.     

Students’ conceptualisations of multiplication as repeated addition or equal groups in relation to multi-digit and decimal numbers

Multiplicative understanding is essential for mathematics learning and is supported by models for multiplication, such as equal groups and rectangular area, different calculations and arithmetical properties, such as distributivity. We investigated two students’ multiplicative understanding through their connections between models for multiplication, calculations and arithmetical properties and how their connections changed during the school years when multiplication is extended to multi-digits and decimal numbers. The case studies were conducted by individual interviews over five semesters. The students did not connect calculations to models for multiplication, but showed a robust conceptualisation of multiplication as repeated addition or equal groups. This supported their utilisation of distributivity to multi-digits, but constrained their utilisation of commutativity and for one student to make sense of decimal multiplication     

Nonstandard finite difference method revisited and application to the Ebola virus disease transmission dynamics

We provide effective and practical guidelines on the choice of the complex denominator function of the discrete derivative as well as on the choice of the nonlocal approximation of nonlinear terms in the construction of nonstandard finite difference (NSFD) schemes. Firstly, we construct nonstandard one-stage and two-stage theta methods for a general dynamical system defined by a system of autonomous ordinary differential equations. We provide a sharp condition, which captures the dynamics of the continuous model. We discuss at length how this condition is pivotal in the construction of the complex denominator function. We show that the nonstandard theta methods are elementary stable in the sense that they have exactly the same fixed-points as the continuous model and they preserve their stability, irrespective of the value of the step size. For more complex dynamical systems that are dissipative, we identify a class of nonstandard theta methods that replicate this property. We apply the first part by considering a dynamical system that models the Ebola Virus Disease (EVD). The formulation of the model involves both the fast/direct and slow/indirect transmission routes. Using the specific structure of the EVD model, we show that, apart from the guidelines in the first part, the nonlocal approximation of nonlinear terms is guided by the productive-destructive structure of the model, whereas the choice of the denominator function is based on the conservation laws and the sub-equations that are associated with the model. We construct a NSFD scheme that is dynamically consistent with respect to the properties of the continuous model such as: positivity and boundedness of solutions; local and/or global asymptotic stability of disease-free and endemic equilibrium points; dependence of the severity of the infection on self-protection measures. Throughout the paper, we provide numerical simulations that support the theory.