Welfare of naive and sophisticated players in school choice

Two main school choice mechanisms have attracted the attention in the literature: Boston and deferred acceptance (DA). The question arises on the ex-ante welfareimplications when the game is played by participants that vary in terms of their strategicsophistication. Abdulkadiroglu, Che and Yasuda (2011) have shown that the chances ofnaive participants getting into a good school are higher under the Boston mechanism thanunder DA, and some naive participants are actually better off. In this note we show thatthese results can be extended to show that, under the veil of ignorance, i.e. students not yetknowing their utility values, all naive students may prefer to adopt the Boston mechanism.

Does Reasoning Enhance Learning?

Utilizing the well-known Ultimatum Game, this note presents the following phenomenon. If we start with simple stimulus-response agents, learning through naive reinforcement, and then grant them some introspective capabilities, we get outcomes that are not closer but farther away from the fully introspective game-theoretic approach. The cause of this is the following: there is an asymmetry in the information that agents can deduce from their experience, and this leads to a bias in their learning process.

The credit ratings game

The spectacular failure of top-rated structured finance products has broughtrenewed attention to the conflicts of interest of Credit Rating Agencies (CRAs). We modelboth the CRA conflict of understating credit risk to attract more business, and the issuerconflict of purchasing only the most favorable ratings (issuer shopping), and examine theeffectiveness of a number of proposed regulatory solutions of CRAs. We find that CRAs aremore prone to inflate ratings when there is a larger fraction of naive investors in the marketwho take ratings at face value, or when CRA expected reputation costs are lower. To theextent that in booms the fraction of naive investors is higher, and the reputation risk forCRAs of getting caught understating credit risk is lower, our model predicts that CRAs aremore likely to understate credit risk in booms than in recessions. We also show that, due toissuer shopping, competition among CRAs in a duopoly is less efficient (conditional on thesame equilibrium CRA rating policy) than having a monopoly CRA, in terms of both totalex-ante surplus and investor surplus. Allowing tranching decreases total surplus further.We argue that regulatory intervention requiring upfront payments for rating services (beforeCRAs propose a rating to the issuer) combined with mandatory disclosure of any ratingproduced by CRAs can substantially mitigate the con.icts of interest of both CRAs andissuers.

Does eeasoning enhance learning?

Utilizing the well-known Ultimatum Game, this note presents the following phenomenon. If we start with simple stimulus-response agents,learning through naive reinforcement, and then grant them some introspective capabilities, we get outcomes that are not closer but farther away from the fully introspective game-theoretic approach. The cause of this is the following: there is an asymmetry in the information that agents can deduce from their experience, and this leads to a bias in their learning process.

Adaptive dynamics and the implementation problem with complete information

This paper studies the equilibrating process of several implementationmechanisms using naive adaptive dynamics. We show that the dynamics convergeand are stable, for the canonical mechanism of implementation in Nash equilibrium.In this way we cast some doubt on the criticism of ``complexity'' commonlyused against this mechanism. For mechanisms that use more refined equilibrium concepts,the dynamics converge but are not stable. Some papers in the literatureon implementation with refined equilibrium concepts have claimed that themechanisms they propose are ``simple'' and implement ``everything'' (incontrast with the canonical mechanism). The fact that some of these ``simple''mechanisms have unstable equilibria suggests that these statements shouldbe interpreted with some caution.

Experiencia con Telaprevir en una corte de pacientes monoinfectados y coinfectados en un hospital de tercer nivel

Objetivos: avaluar tasas de respuestas y seguridad, a las 24 semanas del inicio de tratamiento, en pacientes monoinfectados por VHC y coinfectados VIH/VHC con Telaprevir. Métodos: estudio descriptivo transversal de los pacientes mono y coinfectados (tanto “naive”, recaedores, no respondedores y respondedores parciales), tratados con Telaprevir en una Unidad de Enfermedades Infecciosas. Se recogieron los datos demográficos de cada paciente, datos analíticos, inmunológicos y virológicos así como la determinación de polimorfismo IL B28. Se recogen datos basales y a las 4, 8, 12 y 24 semanas. Resultados: un total de 43 pacientes analizados que iniciaron tratamiento con Telaprevir. Completan tratamiento hasta 12 semanas los 43, y hasta la semana 24 con Peginterferon y Rivabirina un total de 35 pacientes. Un 48% eran pacientes monoinfectados y un 51% coinfectados VIH-VHC. Un 80% eran hombres y un 20% mujeres, con una edad media de 52 años +/- 8´79. A las 12 semanas, un 76% de los pacientes monoinfectados y un 86% de los coinfectados tenían indetectable VHC, y a las 24 semanas un 86% de los monoinfectados y un 90% de los coinfectados, mantenían respuesta viral en tratamiento, sin ser estas diferencias estadísticamente significativas. De la misma forma no se encontraron diferencias estadísticamente significativas en las proporciones de efectos secundarios. Conclusiones: la efectividad y la seguridad del tratamiento con triple terapia que incluye Teleprevir en la infección crónica de VHC, son similares en pacientes monoinfectados y coinfectados.

Multiscaling and information content of natural color images

Naive scale invariance is not a true property of natural images. Natural monochrome images possess a much richer geometrical structure, which is particularly well described in terms of multiscaling relations. This means that the pixels of a given image can be decomposed into sets, the fractal components of the image, with well-defined scaling exponents [Turiel and Parga, Neural Comput. 12, 763 (2000)]. Here it is shown that hyperspectral representations of natural scenes also exhibit multiscaling properties, observing the same kind of behavior. A precise measure of the informational relevance of the fractal components is also given, and it is shown that there are important differences between the intrinsically redundant red-green-blue system and the decorrelated one defined in Ruderman, Cronin, and Chiao [J. Opt. Soc. Am. A 15, 2036 (1998)].