Simple Rules Of Thumb Research Articles

Less is more: Simple rules of thumb may be best for complex financial decisions

Less is more: Simple rules of thumb may be best for complex financial decisions

Russian cyclical indicators and their usefulness in real time. (Report)

This report investigates the predictability of cyclical turning points in Russia. For years, anyone interested in Russia had access to a full set of common tools for business cycle analysis, such as several composite leading indicators, a purchasing managers’ index, enterprise and consumer sentiment indexes, and so on. However, the 2008-09 world financial crisis spread throughout Russia quite unexpectedly for most politicians, businessmen and experts alike. Is it possible that none of existing indexes were able to say anything about the approaching decline? Using a simple rule of thumb proposed in this report one may easily see that that in reality this was not the case. So then why did a more or less definite forecast provided by some indexes have no consequences for common economic sentiments in Russia? This report gives some answers to this question. Keywords: recession; growth cycles; cyclical indicators; leading indicators; turning points; Russia JEL classification: E32

Tuning Method Aimed at Optimized Settling Time and Overshoot for Synchronous Proportional-Integral Current Control in Electric Machines

Implementation of proportional-integral controllers in synchronous reference frame is a well-established current control solution for electric machines. Nevertheless, their gain selection is still regarded to be poorly reported, particularly in relation to the influence of the computation and modulation delay. To fill this gap, a design procedure to set the maximum gains for an acceptable damped response, with the delay being considered, has been recently proposed. In contrast, this paper presents a simple rule of thumb to achieve nearly the minimum settling time in combination with negligible overshoot for reference changes. This conclusion is theoretically demonstrated by the analysis of root locus diagrams and of overshoot versus settling time trajectories for sweeps of gain values. The design approaches aimed at gain maximization and the one developed here are compared, revealing that the latter provides shorter settling time and much lower overshoot in the command tracking response, while allowing greater stability margins. On the other hand, the proposed tuning method leads to a worse disturbance rejection, but by including an active resistance with enhanced pole/zero cancellation as a second degree of freedom, both design procedures attain comparable and optimized attenuation of disturbances. Matching simulation and experimental results validate the theoretical study.

Variability in costs across hospital wards. A study of Chinese hospitals.

IntroductionAnalysts estimating the costs or cost-effectiveness of health interventions requiring hospitalization often cut corners because they lack data and the costs of undertaking full step-down costing studies are high. They sometimes use the costs taken from a single hospital, sometimes use simple rules of thumb for allocating total hospital costs between general inpatient care and the outpatient department, and sometimes use the average cost of an inpatient bed-day instead of a ward-specific cost.PurposeIn this paper we explore for the first time the extent and the causes of variation in ward-specific costs across hospitals, using data from China. We then use the resulting model to show how ward-specific costs for hospitals outside the data set could be estimated using information on the determinants identified in the paper.MethodologyWard-specific costs estimated using step-down costing methods from 41 hospitals in 12 provinces of China were used. We used seemingly unrelated regressions to identify the determinants of variability in the ratio of the costs of specific wards to that of the outpatient department, and explain how this can be used to generate ward-specific unit costs.FindingsWard-specific unit costs varied considerably across hospitals, ranging from 1 to 24 times the unit cost in the outpatient department — average unit costs are not a good proxy for costs at specialty wards in general. The most important sources of variability were the number of staff and the level of capacity utilization.Practice ImplicationsMore careful hospital costing studies are clearly needed. In the meantime, we have shown that in China it is possible to estimate ward-specific unit costs taking into account key determinants of variability in costs across wards. This might well be a better alternative than using simple rules of thumb or using estimates from a single study.

A hybrid procedure for efficient link dimensioning

An important task for network operators is to properly dimension the capacity of their links. Often, this is done by simple rules of thumb based on coarse traffic measurements provided, e.g., by SNMP. More accurate estimations of the required link capacity typically require packet-level measurements, which are hard to implement in today’s high-speed networks. The challenge is, therefore, to accurately estimate the traffic statistics needed for estimating the required link capacity with minimal traffic measurement effort. This paper proposes a novel, hybrid procedure for link dimensioning that combines flow-level measurements, minimal efforts on packet captures, and an analytical traffic model. The result is an efficient and robust method to estimate required link capacities. Although the idea of estimating required capacities from flows is not new, the novelty of this paper is that it proposes a complete, efficient and deployable procedure. The proposed procedure has been extensively validated using real-world traffic captures dating from 2011 to 2012. Results show that, with minimal measurement effort, we are able to efficiently estimate the required bandwidth at timescales as low as 1ms.

Fast particle confinement with optimized coil currents in the W7-X stellarator

One of the principal goals of the W7-X stellarator is to demonstrate good confinement of energetic ions at finite β. This confinement, however, is sensitive to the magnetic field configuration and is thus vulnerable to design modifications of the coil geometry. The collisionless drift orbit losses for 60 keV protons in W7-X are studied using the ANTS code. Particles in this energy range will be produced by the neutral beam injection (NBI) system being constructed for W7-X, and are particularly important because protons at this energy accurately mimick the behaviour of 3.5 MeV α-particles in a HELIAS reactor.To investigate the possibility of improved fast particle confinement, several approaches to adjust the coil currents (5 main field coil currents +2 auxiliary coil currents) were explored. These strategies include simple rules of thumb as well as computational optimization of various properties of the magnetic field.It is shown that significant improvement of collisionless fast particle confinement can be achieved in W7-X for particle populations similar to α particles produced in fusion reactions. Nevertheless, the experimental goal of demonstrating confinement improvement with rising plasma pressure using an NBI-generated population appears to be difficult based on optimization of the coil currents only. The principal reason for this difficulty is that the NBI deposition profile is broader than the region of good fast-ion confinement around the magnetic axis.

On the Pilot Carrier Placement in Multicarrier-Based Systems

In traditional multicarrier systems, the pilot carriers used to estimate the channel are placed as uniform as possible over the bandwidth. However, with the raise of cognitive radio systems, where the multicarrier system is used by the secondary users, parts of the bandwidth are not available for transmission as primary users are active in these bands. Therefore, the multicarrier system must introduce guard bands in which the carriers may not be used. Hence, a problem might occur when placing the pilot carriers. In this paper, we investigate the effect of the positions of the pilot carriers on the MSE performance of channel estimation, and look for the pilot carrier placement that minimizes the MSE. We do not restrict our attention to multicarrier systems with a cyclic prefix, but we also consider other types of guard interval that are used for multicarrier transmission. It is known that an equidistantly-spaced distribution of the pilot carriers is in general not the optimal placement of the pilot carriers, as the corresponding MSE can become very high. In this paper, we use a heuristic algorithm to search for the best pilot placement, which is able to deliver a pilot carrier placement that outperforms the maximum distance distribution from [S. Song and A. C. Singer, “Pilot-Aided OFDM Channel Estimation in the Presence of the Guard Band,” IEEE Trans. Commun., vol. 55, no. 8, pp. 1459-1465, Aug. 2008] in terms of the MSE, and results in an MSE that is close to the case where no guard bands are present. Based on the results of the algorithm, we can derive some simple rules of thumb to select the positions of the pilot carriers.

On the Incentive Effect of Job Rotation

A new employee may work hard to build his reputation. However, the longer he is employed in his job, the more the firm will have learned about his ability. When there are career concerns, the incentives for an employee to influence the firm's perceptions of his ability decrease over time. Rotating the employee to a different job results in information loss regarding ability, thereby adding fresh impetus for effort. However, job rotation also reduces the time horizon, thus reducing future rents from effort. We show that a simple rule of thumb for an optimal assignment duration is 4 periods multiplied by the ratio of output uncertainty to prior type uncertainty. Then, we study several extensions: different bargaining positions, partial information loss, as well as learning by doing effects.

Optimal Domain Splitting for Interpolation by Chebyshev Polynomials

Polynomial interpolants defined using Chebyshev extreme points as nodes converge uniformly at a geometric rate when sampling a function that is analytic on an interval. However, the convergence rate can be arbitrarily close to unity if the function has a singularity close to the interval when extended to the complex plane. In such cases, splitting the interval and doing piecewise interpolation may be more efficient in the total number of nodes than the global interpolant. Because the convergence rate is determined by Bernstein ellipses obtained through a Joukowski conformal map, relative efficiency of splitting at any point in the interval can be calculated and then optimized over the interval. The optimal splitting may be applied recursively. The Chebfun software project uses a simple rule of thumb without prior singularity information to create a binary search that can be shown to do an excellent job of finding the optimal splitting in most cases. However, the process can use a large number of intermediate function evaluations that are not needed in the final approximant. A Chebyshev--Padé technique generates approximate singularity locations that are good enough to get close to the optimal splitting more directly in test cases. The technique is applied to a singularly perturbed boundary-value problem.

Young children's understanding of ownership rights for newly made objects

Young children often use simple rules of thumb to infer ownership of objects, but do they also understand ownership rights? We investigated whether 2- and 3-year-olds would react to violations of ownership rights in the context of newly made objects. In Experiment 1, children protested and made spontaneous reference to ownership when a puppet took away the child's object, but protested little when a third party's objects were at stake. Yet, 3-year-olds attributed ownership to the third party when asked ownership questions. Children's ownership claims were due to the effort invested in making new things, as they rarely used ownership protest after having handled raw materials (Experiment 2). Two- and 3-year-olds thus showed an appreciation of ownership rights for their own newly made objects. While 3-year-olds understood third party ownership, they may have lacked the motivation to intervene in ownership rights violations involving a third party.

Coastal state indicators to assess the morphological development of the Holland coast due to natural and anthropogenic pressure factors

The description of the state and possible changes of a physical system, through an objective, simple and standard methodology is becoming a daily requirement for coastal managers. The implementation of national and international regulations is in fact nearly fully based on the use of such indicators. On the other hand, scientists spend a considerable effort into trying to express and understand the physical processes underlying a certain system, but often they do not put the necessary effort to translate them into useful indicators which can be used by coastal managers. This paper tries to close the existing gap between scientists and coastal managers by describing the morphological development of the Holland coast through an indicator approach. In particular, three indicators have been chosen to quantify three different coastal functions, i.e. the short-term safety, the medium term safety and the available space for nature and recreation. The dynamics of the indicators have been quantified in relation to the external pressure factors determining those changes. Those relations provide simple rules of thumb which can be used by coastal managers to quantify the effects of specific actions (e.g. implementation of nourishments), to assess the impact of changes in the natural forcing (e.g due to climate change), or as a basis for cost-benefit analysis.

Measurement of Stable Isotope Ratios in Methylamphetamine: A Link to Its Precursor Source

The illicit drug methylamphetamine is often prepared from the precursor ephedrine or pseudoephedrine, which in turn are obtained by three processes: extraction from the Ephedra plant ("natural"), via fermentation of sugars ("semi-synthetic"), and by a "fully synthetic" route from propiophenone. We report the first method to differentiate between the three industrial routes used to produce the precursors ephedrine and pseudoephedrine by measurement of stable isotope ratios of nitrogen (δ(15)N), hydrogen (δ(2)H), and carbon (δ(13)C). Analysis of 782 samples of seized methylamphetamine allowed classification into three groups using k-means clustering or the expectation-maximization algorithm applied to a Gaussian mixture model. By preparation of 30 samples of ephedrine by the "fully synthetic" industrial process and measuring their δ(15)N, δ(2)H, and δ(13)C values, we observed that (15)N becomes significantly depleted compared to the methylamine starting material. Conversion of ten ephedrine samples to methylamphetamine showed that this depletion is maintained in the final drug product, of which the δ(15)N, δ(13)C, and δ(2)H values were distinct from those of ephedrine and methylamphetamine samples of a semi-synthetic (fermentation pathway) origin. Combining modeling analysis with the new experiments and published information on the values of δ(2)H gave a definitive assignment of the three model groups, and equations to obtain probabilities for the precursor origin of any new sample. A simple rule of thumb is also presented. Making an assignment using delta values is particularly useful when no other chemical profiling information is available.

Geomechanical impacts on flow in fractured reservoirs

Abstract Flow responses in fractured reservoirs are difficult to predict. Apparent success in predicting flow has been achieved by developing simple rules of thumb based on (i) alterations of effective stress associated with pore pressure changes or (ii) concepts about fracture aperture alterations due to stress changes. Here it is argued that the assumptions underlying these explanations of flow are flawed, as they are based on ideas about stress that are physically wrong. It may be that these simple ideas can be fitted to some observations, but their use in this fashion is highly risky. The role of geomechanics in fractured reservoirs is more complex than suggested by the simple rules of thumb, as illustrated by numerical simulations that demonstrate the occurrence of strong non-linear interactions between the fluids, the geomechanics of blocky systems, and thermal changes. The resulting movements within fractured rock masses can cause major alterations of the upscaled flow properties. Flow performance discrepancies that are often associated with the operation of fractured reservoirs can, and often should, be seen as a consequence of motions occurring within the fractured rock mass. The explanations developed here are phenomenologically correct, and are more holistic than existing simple rules of thumb, improving the reliability of predictions.

Irrational fads, short-term memory emulation, and asset predictability

Opponents of the efficient markets hypothesis argue that predictability reflects the psychological factors and “fads” of irrational investors in a speculative market. In that, conventional time series analysis often fails to give an accurate forecast for financial processes due to inherent noise patterns, fat tails, and nonlinear components. A recent stream of literature on behavioral finance has revealed that boundedly rational agents using simple rules of thumb for their decisions under uncertainty provides a more realistic description of human behavior than perfect rationality with optimal decision rules. Consequently, the application of technical analysis in trading could produce high returns. Machine learning techniques have been employed in economic systems in modeling nonlinearities and simulating human behavior. In this study, we expand the literature that evaluates return sign forecasting ability by introducing a recurrent neural network approach that combines heuristic learning and short-term memory emulation, thus mimicking the decision-making process of boundedly rational agents. We investigate the relative direction-of-change predictability of the neural network structure implied by the Lee–White–Granger test as well as compare it to other well-established models for the DJIA index. Moreover, we examine the relationship between stock return volatility and returns. Overall, the proposed model presents high profitability, in particular during “bear” market periods.

A NOTE ON UNCERTAINTY IN SAVINGS DECISIONS: CAN A NAÏVE STRATEGY BE OPTIMAL?

This paper analyzes the process of decision-making on consumption in a two-period consumption setting, assuming the return on savings is uncertain in the sense of Knight [Risk, Uncertainty, and Profit. Boston: Houghton Mifflin (1921)]. The results imply that a naïve strategy to save zero is optimal for a continuum of income values. Under the Permanent Income Hypothesis, consumption equals current income only when current income is equal to permanent income. Indeed Campbell and Mankiw [in Olivier Blanchard and Stanley Fischer (eds.),NBER Macroeconomics Annual, pp. 185–214. Cambridge, MA: MIT Press (1989)] assumed that consumers who spend their total income are only following a simple rule of thumb. However, the naïve strategy obtained casts doubt on their interpretation.

Model‐based search strategies for plant diseases: a case study using citrus canker (Xanthomonas citri)

AbstractAimBiosecurity responses to incursions aim to achieve pest‐ or disease‐free status as quickly as possible. One of the critical initial response activities involves tracing known movements (trace events) to and from an infected or infested property (IP) that could spread the pest or pathogen. During an incursion response, managers allocate surveillance resources to follow up trace events in order of priority. Prioritizing trace events is difficult and typically subjective. We present a simulation model where several dispersal mechanisms spread a pest between areas. We use model outputs to test different search strategies, using citrus canker (caused by Xanthomonas citri) as a case study. Model scenarios are based on an outbreak of citrus canker that occurred in Queensland in 2004.LocationAustralia.MethodsModel parameters were extracted from published scientific reports and elicited from experts. We used model outputs to assess three search strategies to determine how best to monitor citrus canker spread. Parameters governing disease detectability and host susceptibility were varied in a sensitivity analysis.ResultsIn all simulation scenarios, the ‘adaptive radius’ rule performed best, whereby a circular search area was placed around the IP where the disease outbreak was first detected, with a radius proportional to the estimated number of months the property was infected. Importantly, none of the search rules tested detected all IPs without searching all areas with susceptible hosts in the region.Main conclusionsWe identify a simple rule of thumb for searching during a citrus canker outbreak that is robust to uncertainty. We cannot generalize the results of this study for tracing other pests or pathogens. The model has created a framework that may be used to explore other contexts and disease dynamics, leading perhaps to more general rules for disease outbreak management.

Cryptographic puzzles and DoS resilience, revisited

Cryptographic puzzles (or client puzzles) are moderately difficult problems that can be solved by investing non-trivial amounts of computation and/or storage. Devising models for cryptographic puzzles has only recently started to receive attention from the cryptographic community as a first step toward rigorous models and proofs of security of applications that employ them (e.g. Denial-of-Service (DoS) resistance). Unfortunately, the subtle interaction between the complex scenarios for which cryptographic puzzles are intended and typical difficulties associated with defining concrete security easily leads to flaws in definitions and proofs. Indeed, as a first contribution we exhibit shortcomings of the state-of-the-art definition of security of cryptographic puzzles and point out some flaws in existing security proofs. The main contribution of this paper are new security definitions for puzzle difficulty. We distinguish and formalize two distinct flavors of puzzle security which we call optimality and fairness and in addition, properly define the relation between solving one puzzle versus solving multiple ones. We demonstrate the applicability of our notions by analyzing the security of two popular puzzle constructions. We briefly investigate existing definitions for the related notion of security against DoS attacks. We demonstrate that the only rigorous security notion proposed to date is not sufficiently demanding (as it allows to prove secure protocols that are clearly not DoS resistant) and suggest an alternative definition. Our results are not only of theoretical interest: the better characterization of hardness for puzzles and DoS resilience allows establishing formal bounds on the effectiveness of client puzzles which confirm previous empirical observations. We also underline clear practical limitations for the effectiveness of puzzles against DoS attacks by providing simple rules of thumb that can be easily used to discard puzzles as a valid countermeasure for certain scenarios.

Critical slip and time dependence in sea ice friction

Recent research into sea ice friction has focussed on ways to provide a model which maintains much of the clarity and simplicity of Amonton's law, yet also accounts for memory effects. One promising avenue of research has been to adapt the rate- and state- dependent models which are prevalent in rock friction. In such models it is assumed that there is some fixed critical slip displacement, which is effectively a measure of the displacement over which memory effects might be considered important. Here we show experimentally that a fixed critical slip displacement is not a valid assumption in ice friction, whereas a constant critical slip time appears to hold across a range of parameters and scales. As a simple rule of thumb, memory effects persist to a significant level for 10 s. We then discuss the implications of this finding for modelling sea ice friction and for our understanding of friction in general.

New Rules for the Spaces of Urbanity

The best way to conceive semiotical spaces that are not identical to single buildings, such as a cityscape, is to define the place in terms of the activities occurring there. This conception originated in the proxemics of E. T. Hall and was later generalized in the spatial semiotics of Manar Hammad. It can be given a more secure grounding in terms of time geography, which is involved with trajectories in space and time. We add to this a qualitative dimension which is properly semiotic, and which derives from the notion of border, itself a result of the primary semiotic operation of segmentation. Borders, in this sense, are more or less permeable to different kinds of activities, such as gaze, touch, and movement, where the latter are often not physically defined, but characterized in terms of norms. Norms must be understood along the lines of the Prague school, which delineates as scale going from laws in the legal sense to simple rules of thumb. Such considerations have permitted us to define a number of semio-spatial objects as, most notably, the boulevard, considered as an intermediate level of public space, located between the village square and the coffee house presiding over what Habermas called the public sphere. Urbanity originates as a scene on which the gaze, well before the word, mediates between the sexes, the classes, the cultures, and other avatars of otherness. However, this scenario is seriously upset but the emergence of the cell phone and other technical devices, as well as by the movement of populations.

Inflation targeting in a learning economy: An ABM perspective

This paper investigates the performances of an inflation targeting regime in a learning economy framed as an Agent-Based Model (ABM). We keep our ABM as close as possible to the original New Keynesian (NK) model, but we model the individual behaviour of the agents under procedural rationality à la Simon. Accordingly, we assume that their behaviour is guided by simple rules of thumb – or heuristics – while a continuous learning process governs the evolution of those rules. Under these assumptions that also allow the emergence of agents heterogeneity, we analyze the dynamics of the economy without assuming rational expectations, and study the role that a central bank, implementing an inflation targeting regime via a monetary policy rule, can play in the orientation of these dynamics. Consequently, our main goal is to analyse the interplay between the learning mechanisms operating at the individual level and the features and performances of the inflation targeting regime. Our results point to the prime importance of the credibility of central bank's inflation target regarding macroeconomic stabilisation, as well as the beneficial role played by that target as an anchoring device for private inflation expectations. We also establish the potential welfare cost of imperfect public information and contribute to the current debate on optimal monetary policy rules under imperfect common knowledge and uncertainty.