Probabilistic choice: A simple invariance.

When subjects must choose repeatedly between two or more alternatives, each of which dispenses reward on a probabilistic basis (two-armed bandit ), their behavior is guided by the two possible outcomes, reward and nonreward. The simplest stochastic choice rule is that the probability of choosing an alternative increases following a reward and decreases following a nonreward (reward following ). We show experimentally and theoretically that animal subjects behave as if the absolute magnitudes of the changes in choice probability caused by reward and nonreward do not depend on the response which produced the reward or nonreward (source independence ), and that the effects of reward and nonreward are in constant ratio under fixed conditions (effect-ratio invariance )--properties that fit the definition of satisficing . Our experimental results are either not predicted by, or are inconsistent with, other theories of free-operant choice such as Bush-Mosteller, molar maximization, momentary maximizing, and melioration (matching).

Memorability as a measure of processing: a unit analysis of prose and list learning.

The percentage of subjects recalling each unit in a list or prose passage is considered as a dependent measure. When the same units are recalled in different tasks, processing is assumed to be the same; when different units are recalled, processing is assumed to be different. Two collections of memory tasks are presented, one for lists and one for prose. The relations found in these two collections are supported by an extensive reanalysis of the existing prose memory literature. The same set of words were learned by 13 different groups of subjects under 13 different conditions. Included were intentional free-recall tasks, incidental free recall following lexical decision, and incidental free recall following ratings of orthographic distinctiveness and emotionality. Although the nine free-recall tasks varied widely with regard to the amount of recall, the relative probability of recall for the words was very similar among the tasks. Imagery encoding and recognition produced relative probabilities of recall that were different from each other and from the free-recall tasks. Similar results were obtained with a prose passage. A story was learned by 13 different groups of subjects under 13 different conditions. Eight free-recall tasks, which varied with respect to incidental or intentional learning, retention interval, and the age of the subjects, produced similar relative probabilities of recall, whereas recognition and prompted recall produced relative probabilities of recall that were different from each other and from the free-recall tasks. A review of the prose literature was undertaken to test the generality of these results. Analysis of variance is the most common statistical procedure in this literature. If the relative probability of recall of units varied across conditions, a units by condition interaction would be expected. For the 12 studies that manipulated retention interval, an average of 21% of the variance was accounted for by the main effect of retention interval, 17% by the main effect of units, and only 2% by the retention interval by units interaction. Similarly, for the 12 studies that varied the age of the subjects, 6% of the variance was accounted for by the main effect of age, 32% by the main effect of units, and only 1% by the interaction of age by units.(ABSTRACT TRUNCATED AT 400 WORDS)

Editor's choice Regional trade agreements and export competitiveness: the uncertain path of Nicaragua’s apparel exports under CAFTA

The Central American Free Trade Agreement (CAFTA) has been a mixed blessing for economic development. While exports to the US economy have increased, dependency may hinder economic growth if countries do not diversify or upgrade before temporary provisions expire. This article evaluates the impact of the temporary Tariff Preference Levels (TPLs) granted to Nicaragua under CAFTA and the consequences of TPL expiration. Using trade statistics, country- and firm-level data from Nicaragua’s National Free Zones Commission (CNZF) and data from field research, we estimate Nicaragua’s apparel sector will contract as much as 30–40% after TPLs expire. Our analysis underscores how rules of origin and firm nationality affect where and how companies do business, and in so doing, often constrain sustainable export growth.

Essays in Empirical Operations Management: Bayesian Learning of Service Quality and Structural Estimation of Complementary Product Pricing and Inventory Management

This dissertation contributes to the rapidly growing empirical research area in the field of operations management. It contains two essays, tackling two different sets of operations management questions which are motivated by and built on field data sets from two very different industries --- air cargo logistics and retailing.

The first essay, based on the data set obtained from a world leading third-party logistics company, develops a novel and general Bayesian hierarchical learning framework for estimating customers' spillover learning, that is, customers' learning about the quality of a service (or product) from their previous experiences with similar yet not identical services. We then apply our model to the data set to study how customers' experiences from shipping on a particular route affect their future decisions about shipping not only on that route, but also on other routes serviced by the same logistics company. We find that customers indeed borrow experiences from similar but different services to update their quality beliefs that determine future purchase decisions. Also, service quality beliefs have a significant impact on their future purchasing decisions. Moreover, customers are risk averse; they are averse to not only experience variability but also belief uncertainty (i.e., customer's uncertainty about their beliefs). Finally, belief uncertainty affects customers' utilities more compared to experience variability.

The second essay is based on a data set obtained from a large Chinese supermarket chain, which contains sales as well as both wholesale and retail prices of un-packaged perishable vegetables. Recognizing the special characteristics of this particularly product category, we develop a structural estimation model in a discrete-continuous choice model framework. Building on this framework, we then study an optimization model for joint pricing and inventory management strategies of multiple products, which aims at improving the company's profit from direct sales and at the same time reducing food waste and thus improving social welfare.

Collectively, the studies in this dissertation provide useful modeling ideas, decision tools, insights, and guidance for firms to utilize vast sales and operations data to devise more effective business strategies.

Path Optimization in Free Energy Calculations

Free energy calculations are a computational method for determining thermodynamic quantities, such as free energies of binding, via simulation.

Currently, due to computational and algorithmic limitations, free energy calculations are limited in scope.

In this work, we propose two methods for improving the efficiency of free energy calculations.

First, we expand the state space of alchemical intermediates, and show that this expansion enables us to calculate free energies along lower variance paths.

We use Q-learning, a reinforcement learning technique, to discover and optimize paths at low computational cost.

Second, we reduce the cost of sampling along a given path by using sequential Monte Carlo samplers.

We develop a new free energy estimator, pCrooks (pairwise Crooks), a variant on the Crooks fluctuation theorem (CFT), which enables decomposition of the variance of the free energy estimate for discrete paths, while retaining beneficial characteristics of CFT.

Combining these two advancements, we show that for some test models, optimal expanded-space paths have a nearly 80% reduction in variance relative to the standard path.

Additionally, our free energy estimator converges at a more consistent rate and on average 1.8 times faster when we enable path searching, even when the cost of path discovery and refinement is considered.