Neural Network Evidence for the Coupling of Presaccadic Visual Remapping to Predictive Eye Position Updating.

As we look around a scene, we perceive it as continuous and stable even though each saccadic eye movement changes the visual input to the retinas. How the brain achieves this perceptual stabilization is unknown, but a major hypothesis is that it relies on presaccadic remapping, a process in which neurons shift their visual sensitivity to a new location in the scene just before each saccade. This hypothesis is difficult to test in vivo because complete, selective inactivation of remapping is currently intractable. We tested it in silico with a hierarchical, sheet-based neural network model of the visual and oculomotor system. The model generated saccadic commands to move a video camera abruptly. Visual input from the camera and internal copies of the saccadic movement commands, or corollary discharge, converged at a map-level simulation of the frontal eye field (FEF), a primate brain area known to receive such inputs. FEF output was combined with eye position signals to yield a suitable coordinate frame for guiding arm movements of a robot. Our operational definition of perceptual stability was "useful stability," quantified as continuously accurate pointing to a visual object despite camera saccades. During training, the emergence of useful stability was correlated tightly with the emergence of presaccadic remapping in the FEF. Remapping depended on corollary discharge but its timing was synchronized to the updating of eye position. When coupled to predictive eye position signals, remapping served to stabilize the target representation for continuously accurate pointing. Graded inactivations of pathways in the model replicated, and helped to interpret, previous in vivo experiments. The results support the hypothesis that visual stability requires presaccadic remapping, provide explanations for the function and timing of remapping, and offer testable hypotheses for in vivo studies. We conclude that remapping allows for seamless coordinate frame transformations and quick actions despite visual afferent lags. With visual remapping in place for behavior, it may be exploited for perceptual continuity.

Bayesian Emulation for Sequential Modeling, Inference and Decision Analysis

The advances in three related areas of state-space modeling, sequential Bayesian learning, and decision analysis are addressed, with the statistical challenges of scalability and associated dynamic sparsity. The key theme that ties the three areas is Bayesian model emulation: solving challenging analysis/computational problems using creative model emulators. This idea defines theoretical and applied advances in non-linear, non-Gaussian state-space modeling, dynamic sparsity, decision analysis and statistical computation, across linked contexts of multivariate time series and dynamic networks studies. Examples and applications in financial time series and portfolio analysis, macroeconomics and internet studies from computational advertising demonstrate the utility of the core methodological innovations.

Chapter 1 summarizes the three areas/problems and the key idea of emulating in those areas. Chapter 2 discusses the sequential analysis of latent threshold models with use of emulating models that allows for analytical filtering to enhance the efficiency of posterior sampling. Chapter 3 examines the emulator model in decision analysis, or the synthetic model, that is equivalent to the loss function in the original minimization problem, and shows its performance in the context of sequential portfolio optimization. Chapter 4 describes the method for modeling the steaming data of counts observed on a large network that relies on emulating the whole, dependent network model by independent, conjugate sub-models customized to each set of flow. Chapter 5 reviews those advances and makes the concluding remarks.

Optimal Capital Requirements in Financial Networks with Fire Sales

I explore and analyze a problem of finding the socially optimal capital requirements for financial institutions considering two distinct channels of contagion: direct exposures among the institutions, as represented by a network and fire sales externalities, which reflect the negative price impact of massive liquidation of assets.These two channels amplify shocks from individual financial institutions to the financial system as a whole and thus increase the risk of joint defaults amongst the interconnected financial institutions; this is often referred to as systemic risk. In the model, there is a trade-off between reducing systemic risk and raising the capital requirements of the financial institutions. The policymaker considers this trade-off and determines the optimal capital requirements for individual financial institutions. I provide a method for finding and analyzing the optimal capital requirements that can be applied to arbitrary network structures and arbitrary distributions of investment returns.

In particular, I first consider a network model consisting only of direct exposures and show that the optimal capital requirements can be found by solving a stochastic linear programming problem. I then extend the analysis to financial networks with default costs and show the optimal capital requirements can be found by solving a stochastic mixed integer programming problem. The computational complexity of this problem poses a challenge, and I develop an iterative algorithm that can be efficiently executed. I show that the iterative algorithm leads to solutions that are nearly optimal by comparing it with lower bounds based on a dual approach. I also show that the iterative algorithm converges to the optimal solution.

Finally, I incorporate fire sales externalities into the model. In particular, I am able to extend the analysis of systemic risk and the optimal capital requirements with a single illiquid asset to a model with multiple illiquid assets. The model with multiple illiquid assets incorporates liquidation rules used by the banks. I provide an optimization formulation whose solution provides the equilibrium payments for a given liquidation rule.

I further show that the socially optimal capital problem using the ``socially optimal liquidation" and prioritized liquidation rules can be formulated as a convex and convex mixed integer problem, respectively. Finally, I illustrate the results of the methodology on numerical examples and

discuss some implications for capital regulation policy and stress testing.