Translucent Procedures, Abstraction without Opacity

This report introduces TRANSLUCENT PROCEDURES as a new mechanism for implementing behavioral abstractions. Like an ordinary procedure, a translucent procedure can be invoked, and thus provides an obvious way to capture a BEHAVIOR. Translucent procedures, like ordinary procedures, can be manipulated as first-class objects and combined using functional composition. But unlike ordinary procedures, translucent procedures have structure that can be examined in well-specified non-destructive ways, without invoking the procedure.

A View on Dyslexia

We describe here, briefly, a perceptual non-reading measure which reliably distinguishes between dyslexic persons and ordinary readers. More importantly, we describe a regimen of practice with which dyslexics learn a new perceptual strategy for reading. Two controlled experiment on dyslexics children demonstrate the regimen's efficiency.

A Nonparametric Approach to Pricing and Hedging Derivative Securities via Learning Networks

We propose a nonparametric method for estimating derivative financial asset pricing formulae using learning networks. To demonstrate feasibility, we first simulate Black-Scholes option prices and show that learning networks can recover the Black-Scholes formula from a two-year training set of daily options prices, and that the resulting network formula can be used successfully to both price and delta-hedge options out-of-sample. For comparison, we estimate models using four popular methods: ordinary least squares, radial basis functions, multilayer perceptrons, and projection pursuit. To illustrate practical relevance, we also apply our approach to S&P 500 futures options data from 1987 to 1991.