Problem Of Imperfect Information Research Articles

Completeness out of incompleteness: Inferences from regularities in imperfect information ensembles.

Handling imperfect information problems is fundamental to perception, learning, and decision-making. Ensemble perception may partially overcome imperfect information by providing global clues. However, if not all cluster elements are readily accessible, the observations required for computing statistics are incomplete. In this case, these elements' internal correlations (i.e., regularity) could serve as clues to elucidate the missing pieces. We thus investigated spatial regularity's role in ensemble perception under imperfect information situations created using partially occluded stimuli. In two experiments, we manipulated circle size (Experiment 1) and line orientation (Experiment 2) to linearly vary with its location; spatial regularity thus supplied clues for inferring information of the invisible parts. Participants estimated the mean of the targeted feature of the entire cluster, including visible and invisible parts. We observed robust biases toward the overall cluster in the estimations, implying the invisible parts were considered during ensemble perception. We proposed this effect could be understood as assessing evidence from visible parts to construct the missing parts. Experiment 3 employed a periodicity regularity to deter participants from using specific strategies, and consistent results were found. We then developed a generative model, the Regularity-Based Model, to simulate the inference process, which better captured the pattern of human outcomes than the comparative model. These findings indicate the visual system could use high-level structural information to infer scenes with incomplete information, thus producing more accurate ensemble representations. (PsycInfo Database Record (c) 2023 APA, all rights reserved).

Screening and Monitoring in Informal Credit Markets: Evidence from Rural Punjab

The present article examines the screening and monitoring strategies used by lenders to solve the problem of imperfect information in the rural informal credit market. The study uses data from a primary survey conducted in Punjab, India. The survey focuses on informal lending between commission agents and farmers. Data were collected from 120 randomly selected commission agents from four blocks. Each of the blocks represents a different development level. The results show that commission agents invested significant time and resources for screening and monitoring the farmers. The screening and monitoring were found to be more stringent in areas that were underdeveloped and had higher default risk. Commission agents could shift a significant share of the screening cost to the borrowers, thereby increasing their self-enforcement range. The study argues that high screening cost hurts small farmers. The regression results found a significant reduction in the default rate and the unrecovered loan due to screening strategies. JEL Classification: D81, E26, Q14

Does Information Disclosure Improve Consumer Knowledge?

We estimate the impact of information disclosure on consumer knowledge in an important context: the calorie content of restaurant food. We conduct a randomized controlled experiment of calorie labels on restaurant menus, and find that information disclosure improves consumer knowledge but does not eliminate the problem of imperfect information. Calorie labels improve consumers’ post-meal estimates of the number of calories they ordered by 4.0 percent and reduce by 28.9 percent the probability that consumers underestimate the calories in their meal by half or more. However, even after information disclosure, the absolute value of percent error averages 34.2 percent.

Learning Macromanagement in Starcraft by Deep Reinforcement Learning.

StarCraft is a real-time strategy game that provides a complex environment for AI research. Macromanagement, i.e., selecting appropriate units to build depending on the current state, is one of the most important problems in this game. To reduce the requirements for expert knowledge and enhance the coordination of the systematic bot, we select reinforcement learning (RL) to tackle the problem of macromanagement. We propose a novel deep RL method, Mean Asynchronous Advantage Actor-Critic (MA3C), which computes the approximate expected policy gradient instead of the gradient of sampled action to reduce the variance of the gradient, and encode the history queue with recurrent neural network to tackle the problem of imperfect information. The experimental results show that MA3C achieves a very high rate of winning, approximately 90%, against the weaker opponents and it improves the win rate about 30% against the stronger opponents. We also propose a novel method to visualize and interpret the policy learned by MA3C. Combined with the visualized results and the snapshots of games, we find that the learned macromanagement not only adapts to the game rules and the policy of the opponent bot, but also cooperates well with the other modules of MA3C-Bot.

Managing consumers’ visual attention in the context of information asymmetry

The problem of imperfect information is one of the central focuses of institutional economics. Information asymmetry creates a contextual environment for marketing promotion. Its manifestations are associated with both the inability for the buyer to know the true price of the product and the risk of making the wrong choice. The paper deals with the assessment of information asymmetry that occurs in retail trade, as well as the development of algorithms for identifying areas of visual consumer interest that are responsible for consumer decision-making. The methodological framework of the research is based on experimental economics, including the methods of classical marketing and neuromarketing. The information base of the study embraces the research works of Russian and foreign scholars published in the leading peer-reviewed journals, as well as the authors’ previous studies, designed algorithms and methods for analyzing marketing and neuromarketing data. Empirical and experimental results show that when making a choice and a purchase decision, the buyer is guided by different types of information attributes that create information asymmetry. We put forward and statistically confirm five hypotheses concerning the optimization of consumer visual attention management, such as: there are differences in eye movement behavior of men and women when choosing goods; there is a correlation between time spent in a store and the number of impulse purchases made; the design of supermarket shelves increases the amount of visual attention; there is a relationship between the visual hierarchy of products and consumer choice; and information asymmetry of product display proves the redundancy of unstructured visual information. The research results are useful for retail businesses and are of high importance in terms of the fundamental understanding of the space organization in stores, as this allows getting new evidence about the possibilities of consumer visual attention management.

Non-traditional monetary policy and the future of the financial industries

This paper investigates how expansionary monetary policy after the Global Financial Crisis (GFC) has affected the U.S. banking sector. In response to the GFC, the Federal Reserve first lowered the overnight federal funds rate from 5.25% in August 2007 to zero in December 2008. It then turned to quantitative easing, purchasing housing agency debt, mortgage-backed securities, and longer-term Treasury bonds to stimulate the economy. While these policies helped the overall economy to recover, they may have harmed the banking sector. Banks accept safe short-term deposits and transform these into risky longer-term loans. They make a profit on the difference between the interest rate they earn on longer-term assets and the rate they pay of short-term deposits (the net interest margin). Low short-term interest rates and compressed spreads between long- and short-term interest rates may impair bank profitability. Bernanke and Gertler (J Econ Perspect 4:27–48, 1995) showed that reduced bank profitability can hinder their ability to extend loans. Bernanke (FRBNY Q Rev 18:50–70, 1993) noted that this is problematic because banks play a special role in channeling savings to promising borrowers. Financial markets are plagued by information imperfections. Savers release funds today for the promise of obtaining funds later. Whether they get repaid depends on the character of the borrower, the quality of the investment, the collateral that the borrower can provide, and other factors. The lender needs to consider these items and not just interest rates. Asymmetric information can thus hinder the flow of funds from savers to small businesses and other borrowers whose quality is hard to evaluate. Banks can bridge imperfect information problems because they have a comparative advantage because of the following reasons: (1) economies of specialization, as lending officers gain expertise in a particular industry; (2) economies of scale, as it is cheaper for bank to evaluate a loan than for small savers to; and (3) economies of scope, as it is cheaper to provide lending services together with other services. This paper investigates how lower short-term rates and falls in the spread between long-and short-term rates affect bank profitability. To do this, it investigates how these variables affect bank stock prices. Stock prices provide valuable information since they are the expected present value of future cash flows. The results indicate that falls in short rates and in the spread have caused large drops in bank stock returns after the GFC. Banks are also facing competitive pressures from Fin Tech firms and big technology firms. Their performance after the GFC has lagged other parts of the U.S. economy. They are thus vulnerable to negative shocks that could arise during a downturn or a crisis. The Fed should take account of the impact of their policies on the banking sector, since an interruption on the flow of credit through the financial system could prevent funds from going to the most promising firms. This misallocation of resources could then hinder long-term economic growth.

How Public Information Affects Asymmetrically Informed Lenders: Evidence from a Credit Registry Reform

We exploit exogenous variation in the amount of public information available to banks about a firm to empirically evaluate the importance of adverse selection in the credit market. A 2006 reform introduced by the State Bank of Pakistan (SBP) reduced the amount of public information available to Pakistani banks about a firm's creditworthiness. Prior to 2006, the SBP published credit information not only about the firm in question but also (aggregate) credit information about the firm's group (where the group was defined as the set of all firms that shared one or more director with the firm in question). After the reform, the SBP stopped providing the aggregate group-level information. We propose a model with differentially informed banks and adverse selection, which generates predictions on how this reform is expected to affect a bank's willingness to lend. The model predicts that adverse selection leads less informed banks to reduce lending compared to more informed banks. We construct a measure for the amount of information each lender has about a firm's group using the set of firm-bank lending pairs prior to the reform. We empirically show those banks with private information about a firm lent relatively more to that firm than other, less-informed banks following the reform. Remarkably, this reduction in lending by less informed banks is true even for banks that had a pre-existing relationship with the firm, suggesting that the strength of prior relationships does not eliminate the problem of imperfect information.

How public information affects asymmetrically informed lenders: Evidence from a credit registry reform

We exploit exogenous variation in firm's public information available to banks to empirically evaluate the importance of adverse selection in the credit market using a Pakistani banking reform that reduced public information. Originally, the central bank published credit information about the firm and (aggregate) credit information about the firm's group. After the reform, the central bank stopped providing the aggregate group-level information. We construct a measure for the amount of information each lender has about a firm's group using the set of firm-bank lending pairs prior to the reform. We show those banks with private information about a firm lent relatively more to that firm than other, less-informed banks following the reform. Remarkably, this reduction in lending by less informed banks is true even for banks that had a preexisting relationship with the firm, suggesting that the strength of prior relationships does not eliminate the problem of imperfect information.

The commuting behaviour of self‐employed workers: Evidence for Spain

AbstractThe aim of the paper is to examine the commuting behaviour of self‐employed workers in Spain as well as its relationship with satisfaction with jobs and housing. According to our results although conventional estimations indicate that commuting trips are shorter among the self‐employed, the differences with employees vanish when the potential endogeneity of self‐employment is controlled for. We also show that the job and housing satisfaction levels of the self‐employed are less sensitive to commuting than those of employees, and that in fact no significant effect is observed for relevant segments of the former group, what gives partial support to the theoretical model that we propose where imperfect information problems affect the employees but not the self‐employed.

Development of a decision­making method to form the indicators for a university development plan

The problems of decision-making support in the course of designing a university development plan have been studied. This is important because modern tendencies in the development of higher educational institution are constantly changing and getting more complicated. Organization management under modern conditions is becoming adaptive, proactive, strategic, requiring a revision of management tools. The basis of strategic planning is indicative planning, which in turn is a form that solves the problem of imperfect information through the indicators that describe an object, a process, or a phenomenon. Effective management of the activity of a higher educational institution in the framework of planning includes the forms and the methods for creating a system of indicators that reflect the picture of the organization state.The process of the development of a university development plan faces the problem of selecting and ranking the indicators of the development of a higher educational institution, covers both tangible and intangible sides and is a multi-criterion problem of decision making. To solve this problem, it is necessary to select a method for decision making support to form the system of indicative indicators. Evaluation of indicative indicators are carried out through the construction of a cognitive map, a priori ranking and the hierarchy analysis method, involving experts from the field of higher education management. The results obtained are compared taking into account the strengths and weaknesses of the selected methods. The decision made on the choice of the method for the formation of indicators implies the joint use of the hierarchy analysis method and the construction of a cognitive map. During the hybrid application of the methods, the mutual influence of the indicators and the compliance of the indicators with directions of the university development should be taken into account. It is not worthwhile applying a priori ranking in order to form an indicator because there are no data on the joint influence of several studied indicators on each other.The results of the study are aimed at simplifying the decision-making process in planning: consideration of bottlenecks when designing a development plan, improvement of operation and learning quality, effective use of tangible and intangible resources.

Data Fusion Based Phase Space Reconstruction from Multi-Time Series

Focused on the problem of imperfect information in the process of reconstruction from single time series, a new technology for phase space reconstruction from multi-time series based on the data fusion is proposed. Firstly, the methods Cao and mutual information are used to select the reconstruction parameters, time delay and embedded dimension; secondly, the social cognitive optimization algorithm is brought to calculate the weights for each variable; thirdly, an adaptive weighted fusion estimating method is applied for data fusion; lastly, the effectiveness of the methods mentioned in this paper is demonstrated by the analysis results of one case study of real chemical plant data sets, and the proposed methods in this paper can improve the completeness of the information of the reconstructed phase space, which is also a good foundation for further analysis of complex system.

Michał Kalecki i problem racjonalnej alokacji zasobów w socjalizmie

The aim of this article is the reconstruction of the views of Michael Kalecki and his followers on rational calculation and allocation of resources in a socialist economy, and also to try to compare their statements with the views of both supporters of capitalism, as well as alternative models of socialism. In this matter the piece examines articles of Polish economists on the pattern formation of prices in capitalism and socialism, the role of the working class and the system of incentives and economic governance. In this paper, we have also discussed the views of the authors who, based on the work of Kalecki, took up a controversy with a circulation narrative explaining the failure of socialism. The conclusion that flows from the preceding analysis is as follows: Real capitalism and real socialism struggle with problems of imperfect information, and soft budgets; a particular model of economic management in this regard is not the direct cause of the failure of the socialist project. In addition to the problem of innovation and optimal investment, from the Kaleckian perspective, a fundamental problem of socialism appears to be the appropriate relations of production in the Marxist sense, understood as democratization of the relationship between the working class and the production management layer.

How Public Information Affects Asymmetrically Informed Lenders: Evidence from a Credit Registry Reform

We exploit exogenous variation in the amount of public information available to banks about a firm to empirically evaluate the importance of adverse selection in the credit market. A 2006 reform introduced by the State Bank of Pakistan (SBP) reduced the amount of public information available to Pakistani banks about a firm's creditworthiness. Prior to 2006, the SBP published credit information not only about the firm in question but also (aggregate) credit information about the firm's group (where the group was defined as the set of all firms that shared one or more director with the firm in question). After the reform, the SBP stopped providing the aggregate group-level information. We propose a model with differentially informed banks and adverse selection, which generates predictions on how this reform is expected to affect a bank's willingness to lend. The model predicts that adverse selection leads less informed banks to reduce lending compared to more informed banks. We construct a measure for the amount of information each lender has about a firm's group using the set of firm-bank lending pairs prior to the reform. We empirically show those banks with private information about a firm lent relatively more to that firm than other, less-informed banks following the reform. Remarkably, this reduction in lending by less informed banks is true even for banks that had a pre-existing relationship with the firm, suggesting that the strength of prior relationships does not eliminate the problem of imperfect information.

Building Opponent Model in Imperfect Information Board games

In imperfect information problems, board game is a class of special problem that differs from card games like poker. Several characters make it a valuable test bed for opponent modeling, which is one of the most difficult problems in artificial intelligence decision systems. In card games, opponent modeling has proved its importance on improving agents’ strength. In this paper, a method of building opponent models in imperfect information board games is introduced systematically. Formalized evaluation method of arrangement strength in board game in proposed. Risk dominance is suggest as the classified criterion of building opponent models and basing that, classified primary probability tables are built as opponent models. Last, Siguo game is chosen as the application for opponent modeling and shows its advantages in the experiments. DOI : http://dx.doi.org/10.11591/telkomnika.v12i3.4113 Full Text: PDF

Generic Drug Names and Social Welfare

This article studies how well International Nonproprietary Names (INNs), the "generic" names for pharmaceuticals, address the problems of imperfect information. Left in private hands, the identification of medicines leads to confusion and errors. Developed in the 1950s by the World Health Organization, INNs are a common, global, scientific nomenclature designed to overcome this failure. Taking stock after sixty years, we argue that the contribution of INNs to social welfare is paramount. They enhance public health by reducing errors and improving patient safety. They also contribute to economic efficiency by creating transparency as the foundation of competitive generic drug markets, reducing transaction costs, and favoring trade. The law in most countries requires manufacturers to designate pharmaceuticals with INNs in labeling and advertising. Generic substitution is also permitted or mandatory in many countries. But not all the benefits of INNs are fully realized because prescribers may not use them. We advocate strong incentives or even legally binding provisions to extend the use of INNs by prescribing physicians and dispensing pharmacists, but we do not recommend replacing brand names entirely with INNs. Instead, we propose dual use of brand names and INNs in prescribing, as in drug labeling.

A Simple, Microfounded Lucas Island Model

This paper provides a version of the Lucas Island model which is both completely microfounded and suitable for teaching. By replacing the original overlapping generation structure with the producer-shopper distinction within the household and using the classical perfect information case as the benchmark of the analysis, the model presented here has two key distinctive features. First, it shows in a critical manner how the imperfect information problem actually arises. Second, it avoids a shortcut approach to modelling aggregate demand by adding a money market to the analysis.

Modelling decision making with probabilistic causation

Humans know how to reason based on cause and effect, but cause and effect is not enough to draw conclusions due to the problem of imperfect information and uncertainty. To resolve these problems, humans reason combining causal models with probabilist

Monetary Policy and Potential Output Uncertainty: A Quantitative Assessment

I estimate a dynamic stochastic general equilibrium model where the policymaker and the private sector have imperfect knowledge about potential output. The estimation of the structural parameters and of the monetary authorities’objectives is key to assess the quantitative relevance of the imperfect information problem and to evaluate the robustness of previous exercises based on calibration. The estimated model also allows me to revisit the Orphanides (2001, 2003) findings that the central bank can makes large and persistent mistakes to estimate potential output in response to productivity and cost shocks. I find that when real unit labor cost is used as a monetary policy indicator, the potential output uncertainty has quantitatively negligible consequences on policy behaviour and inflation dynamics. JEL Classification: E4, E5

FINANCIAL REGULATION: COSTS, BENEFITS AND THE PROCESS OF REGULATORY CHANGE

The process of financial regulation in a market oriented economy. It is a hydra-headed monster due to problems of imperfect information, legal issues surrounding the allocation of responsibilities and powers, difficulties in design of incentive structures and accountability arrangements, and the ongoing evolution of the financial system. This article discusses the terms used in financial regulation and the changes in the costs and benefits.

Another Way to Think About Insurance: Government Action Distorts the Market Price With Harmful Side Effects

Health insurance is similar to all insurance markets with regard to the problem of imperfect information in matching policyholder risk and premium price. Despite this fact, consumers buy insurance for peace of mind, with demand dependent on price and several other factors. Optimal insurance without subsidy covers low-probability, large-loss events. Government intervention in the market through state coverage mandates and community rating, Medicare price controls, and employment tax subsidies has altered the market price, creating hyperinsurance for most and self-insurance for some. Society can deal with the resulting economic efficiency and equity issues by recognizing that government action is the problem.