Interval bias in 2AFC detection tasks: sorting out the artifacts

Proportion correct in two-alternative forcedchoice (2AFC) detection tasks often varies when the stimulus is presented in the first or in the second interval.Reanalysis of published data reveals that these order effects (or interval bias) are strong and prevalent, refuting the standard difference model of signal detection theory. Order effects are commonly regarded as evidence that observers use an off-center criterion under the difference model with bias. We consider an alternative difference model with indecision whereby observers are occasionally undecided and guess with some bias toward one of the response options. Whether or not the data show order effects, the two models fit 2AFC data indistinguishably, but they yield meaningfully different estimates of sensory parameters. Under indeterminacy as to which model governs 2AFC performance, parameter estimates are suspect and potentially misleading. The indeterminacy can be circumvented by modifying the response format so that observers can express indecision when needed. Reanalysis of published data collected in this way lends support to the indecision model. We illustrate alternative approaches to fitting psychometric functions under the indecision model and discuss designs for 2AFC experiments that improve the accuracy of parameter estimates, whether or not order effects are apparent in the data.

Realized Matrix-Exponential Stochastic Volatility with Asymmetry, Long Memory and Spillovers

The paper develops a novel realized matrix-exponential stochastic volatility model of multivariate returns and realized covariances that incorporates asymmetry and long memory (hereafter the RMESV-ALM model). The matrix exponential transformation guarantees the positivedefiniteness of the dynamic covariance matrix. The contribution of the paper ties in with Robert Basmann’s seminal work in terms of the estimation of highly non-linear model specifications (“Causality tests and observationally equivalent representations of econometric models”, Journal of Econometrics, 1988, 39(1-2), 69–104), especially for developing tests for leverage and spillover effects in the covariance dynamics. Efficient importance sampling is used to maximize the likelihood function of RMESV-ALM, and the finite sample properties of the quasi-maximum likelihood estimator of the parameters are analysed. Using high frequency data for three US financial assets, the new model is estimated and evaluated. The forecasting performance of the new model is compared with a novel dynamic realized matrix-exponential conditional covariance model. The volatility and co-volatility spillovers are examined via the news impact curves and the impulse response functions from returns to volatility and co-volatility.