When does ignorance make us smart? Additional factors guiding heuristic inference

“Fast & frugal” heuristics represent an appealing way of implementing bounded rationality and decision-making under pressure. The recognition heuristic is the simplest and most fundamental of these heuristics. Simulation and experimental studies have shown that this ignorance-driven heuristic inference can prove superior to knowledge based inference (Borges, Goldstein, Ortman & Gigerenzer, 1999; Goldstein & Gigerenzer, 2002) and have shown how the heuristic could develop from ACT-R’s forgetting function (Schooler & Hertwig, 2005). Mathematical analyses also demonstrate that, under certain conditions, a “less-is-more effect” will always occur (Goldstein & Gigerenzer, 2002). The further analyses presented in this paper show, however, that these conditions may constitute a special case and that the less-is-more effect in decision-making is subject to the moderating influence of the number of options to be considered and the framing of the question.

A policy model for secure information flow

When a computer program requires legitimate access to confidential data, the question arises whether such a program may illegally reveal sensitive information. This paper proposes a policy model to specify what information flow is permitted in a computational system. The security definition, which is based on a general notion of information lattices, allows various representations of information to be used in the enforcement of secure information flow in deterministic or nondeterministic systems. A flexible semantics-based analysis technique is presented, which uses the input-output relational model induced by an attacker's observational power, to compute the information released by the computational system. An illustrative attacker model demonstrates the use of the technique to develop a termination-sensitive analysis. The technique allows the development of various information flow analyses, parametrised by the attacker's observational power, which can be used to enforce what declassification policies.

Dynamic modulation of human motor activity when observing actions

Previous studies have demonstrated that when we observe somebody else executing an action many areas of our own motor systems are active. It has been argued that these motor activations are evidence that we motorically simulate observed actions; this motoric simulation may support various functions such as imitation and action understanding. However, whether motoric simulation is indeed the function of motor activations during action observation is controversial, due to inconsistency in findings. Previous studies have demonstrated dynamic modulations in motor activity when we execute actions. Therefore, if we do motorically simulate observed actions, our motor systems should also be modulated dynamically, and in a corresponding fashion, during action observation. Using magnetoencephalography (MEG), we recorded the cortical activity of human participants while they observed actions performed by another person. Here, we show that activity in the human motor system is indeed modulated dynamically during action observation. The finding that activity in the motor system is modulated dynamically when observing actions can explain why studies of action observation using functional magnetic resonance imaging (fMRI) have reported conflicting results, and is consistent with the hypothesis that we motorically simulate observed actions.

Ultra narrow filters with good performance when tilted and cooled

Our latest research indicates that narrow bandpass filters of ~0.6% bandwidth (or any larger chosen width) and with good performance ar low temperature and in tilted and focused illumination can be realized by using multicavities and multimaterials.

Constancy in the perception of speech when the level of room-reflections varies

A speech message played several metres from the listener in a room is usually heard to have much the same phonetic content as it does when played nearby, even though the different amounts of reflected sound make the temporal envelopes of these signals very different. To study this ‘constancy’ effect, listeners heard speech messages and speech-like sounds comprising 8 auditory-filter shaped noise-bands that had temporal envelopes corresponding to those in these filters when the speech message is played. The ‘contexts’ were “next you’ll get _to click on”, into which a “sir” or “stir” test word was inserted. These test words were from an 11-step continuum, formed by amplitude modulation. Listeners identified the test words appropriately, even in the 8-band conditions where the speech had a ‘robotic’ quality. Constancy was assessed by comparing the influence of room reflections on the test word across conditions where the context had either the same level of room reflections (i.e. from the same, far distance), or where it had a much lower level (i.e. from nearby). Constancy effects were obtained with both the natural- and the 8-band speech. Results are considered in terms of the degree of ‘matching’ between the context’s and test-word’s bands.

Olive oil increases the number of triacylglycerol-rich chylomicron particles compared with other oils: an effect retained when a second standard meal is fed

Background: Compared with the postprandial events after a single meal, different events occur when a second meal is ingested 4–6 h after a first meal. There is a rapid appearance of chylomicrons in the circulation carrying fat ingested with the first meal, with a peak 1 h after the second meal. Objective: Our goal was to examine whether different dietary oils have effects on the storage of triacylglycerol as a result of differences in their digestion, absorption, and incorporation into chylomicrons. Design: A single-blind, randomized, within-subject crossover design was used to study the effects of palm oil, safflower oil, a mixture of fish and safflower oil, and olive oil on postprandial apolipoprotein (apo) B-48, retinyl ester, and triacylglycerol in the Sf > 400 fraction with the use of a sequential meal protocol. Results: For triacylglycerol, retinyl ester, and apo B-48, the time to reach peak concentration was significantly earlier after the second meal than after the first meal (P < 0.005). This was apparent with each of the dietary oils. The pattern of the apo B-48 response differed significantly among the dietary oils, with olive oil resulting in higher concentrations after both meals (P = 0.003). The ratio of triacylglycerol to apo B-48 was significantly lower after olive oil feeding than after feeding with the other oils (P = 0.02). Conclusions: The rapid entry of chylomicrons after the ingestion of a second meal 5 h after a first meal was seen with all of the oils investigated. The short-term ingestion of olive oil produced more chylomicrons than did the other dietary oils, which may have been due to differences in the metabolic handling of olive oil within the gut.

Information sources and advice used by small business tenants when leasing commercial property

Many small businesses lease commercial premises. The terms of a lease can affect the ability of the business to grow and adapt and have an impact on cashflow. Ensuring that they have the information with which to negotiate terms is part of the UK government policy focus on small businesses. Such information is most effectively disseminated through the sources of advice that small businesses use during the leasing process. Therefore these sources of advice need identifying. An interview survey of small business tenants who have recently taken leases provides initial results that suggest small businesses do not seek out advice during the leasing process or see the need to be better informed. The only formal professional input is from solicitors but this is not until after the main commercial terms have been agreed. The landlords’ letting agents play a key, but ambiguous, role in providing information as well as advice. These results suggest that the most effective way of disseminating information by government could be via the letting agents, the very people with whom the tenants are negotiating.

Diversification when it hurts? The joint distributions of real estate and equity markets

Much of the literature on the construction of mixed asset portfolios and the case for property as a risk diversifier rests on correlations measured over the whole of a given time series. Recent developments in finance, however, focuses on dependence in the tails of the distribution. Does property offer diversification from equity markets when it is most needed - when equity returns are poor. The paper uses an empirical copula approach to test tail dependence between property and equity for the UK and for a global portfolio. Results show strong tail dependence: in the UK, the dependence in the lower tail is stronger than in the upper tail, casting doubt on the defensive properties of real estate stocks.

When does direct real estate improve portfolio performance?

For over twenty years researchers have been recommending that investors diversify their portfolios by adding direct real estate. Based on the tenets of modern portfolio theory (MPT) investors are told that the primary reason they should include direct real estate is that they will enjoy decreased volatility (risk) through increased diversification. However, the MPT methodology hides where this reduction in risk originates. To over come this deficiency we use a four-quadrant approach to break down the co-movement between direct real estate and equities and bonds into negative and positive periods. Then using data for the last 25-years we show that for about 70% of the time a holding in direct real estate would have hurt portfolio returns, i.e. when the other assets showed positive performance. In other words, for only about 30% of the time would a holding in direct real estate lead to improvements in portfolio returns. However, this increase in performance occurs when the alternative asset showed negative returns. In addition, adding direct real estate always leads to reductions in portfolio risk, especially on the downside. In other words, although adding direct real estate helps the investor to avoid large losses it also reduces the potential for large gains. Thus, if the goal of the investor is offsetting losses, then the results show that direct real estate would have been of some benefit. So in answer to the question when does direct real estate improve portfolio performance the answer is on the downside, i.e. when it is most needed.

Changes in the relative importance of sector and regional factors: 1987-2002

A stylised fact in the real estate portfolio diversification literature is that sector (property-type) effects are relatively more important than regional (geographical) factors in determining property returns. Thus, for those portfolio managers who follow a top-down approach to portfolio management, they should first choose in which sectors to invest and then select the best properties in each market. However, the question arises as to whether the dominance of the sector effects relative to regional effects is constant. If not property fund managers will need to take account of regional effects in developing their portfolio strategy. Using monthly data over the period 1987:1 to 2002:12 for a sample of over 1000 properties the results show that the sector-specific factors dominate the regional-specific factors for the vast majority of the time. Nonetheless, there are periods when the regional factors are of equal or greater importance than the sector effects. In particular, the sector effects tend to dominate during volatile periods of the real estate cycle; however, during calmer periods the sector and regional effects are of equal importance. These findings suggest that the sector effects are still the most important aspect in the development of an active portfolio strategy.

When's your birthday? The self-reference effect in retrieval of dates

Material encoded with reference to the self is better remembered. One interpretation of this effect is that the self operates to organise retrieval of memories. We were motivated to find out whether this organisational principle extended to everyday information and for material not explicitly related to the self. Participants generated friends' birthdays from memory and then gave their own birthday. We found that participants were particularly likely to recall birthdays from on or around the date of their own birthday. Thus, memory for birthdays clusters around self-relevant information, even when there is no specific attempt to recall self-related material. Birthdays clustered somewhat around the time of testing, important dates in the calendar, and for a close other, but not to the extent of the participants' birthdays. We suggest this is a demonstration of the organisational structure of the self in memory. Copyright (C) 2010 John Wiley & Sons, Ltd.