The Hierarchical Structure of the Firm: A Geometric Perspective

This paper incorporates hierarchical structure into the neoclassical theory of the firm. Firms are hierarchical in two respects: the organization of workers in production and the wage structure. The firm’s hierarchy is represented as the sector of a circle, where the radius represents the hierarchy’s height, the width of the sector represents the breadth of the hierarchy at a given height, and the angle of the sector represents span of control for any given supervisor. A perfectly competitive firm then chooses height and width, as well as capital inputs, in order to maximize profit. We analyze the short run and long run impact of changes in scale economies, input substitutability and input and output prices on the firm’s hierarchical structure. We find that the firm unambiguously becomes more hierarchical as the specialization of its workers increases or as its output price increases relative to input prices. The effect of changes in scale economies is contingent on the output price. The model also brings forth an analysis of wage inequality within the firm, which is found to be independent of technological considerations, and only depends on the firm’s wage schedule.

Estimating buffer overflows in three stages using cross-entropy

In this paper we propose a fast adaptive Importance Sampling method for the efficient simulation of buffer overflow probabilities in queueing networks. The method comprises three stages. First we estimate the minimum Cross-Entropy tilting parameter for a small buffer level; next, we use this as a starting value for the estimation of the optimal tilting parameter for the actual (large) buffer level; finally, the tilting parameter just found is used to estimate the overflow probability of interest. We recognize three distinct properties of the method which together explain why the method works well; we conjecture that they hold for quite general queueing networks. Numerical results support this conjecture and demonstrate the high efficiency of the proposed algorithm.

A hierarchical latent variable model for data visualization

Visualization has proven to be a powerful and widely-applicable tool the analysis and interpretation of data. Most visualization algorithms aim to find a projection from the data space down to a two-dimensional visualization space. However, for complex data sets living in a high-dimensional space it is unlikely that a single two-dimensional projection can reveal all of the interesting structure. We therefore introduce a hierarchical visualization algorithm which allows the complete data set to be visualized at the top level, with clusters and sub-clusters of data points visualized at deeper levels. The algorithm is based on a hierarchical mixture of latent variable models, whose parameters are estimated using the expectation-maximization algorithm. We demonstrate the principle of the approach first on a toy data set, and then apply the algorithm to the visualization of a synthetic data set in 12 dimensions obtained from a simulation of multi-phase flows in oil pipelines and to data in 36 dimensions derived from satellite images.

On the annealed VC entropy for margin classifiers: A statistical mechanics study

Using techniques from Statistical Physics, the annealed VC entropy for hyperplanes in high dimensional spaces is calculated as a function of the margin for a spherical Gaussian distribution of inputs.

Hierarchical GTM: Constructing localized non-linear projection manifolds in a principled way

It has been argued that a single two-dimensional visualization plot may not be sufficient to capture all of the interesting aspects of complex data sets, and therefore a hierarchical visualization system is desirable. In this paper we extend an existing locally linear hierarchical visualization system PhiVis ¸iteBishop98a in several directions: bf(1) We allow for em non-linear projection manifolds. The basic building block is the Generative Topographic Mapping. bf(2) We introduce a general formulation of hierarchical probabilistic models consisting of local probabilistic models organized in a hierarchical tree. General training equations are derived, regardless of the position of the model in the tree. bf(3) Using tools from differential geometry we derive expressions for local directional curvatures of the projection manifold. Like PhiVis, our system is statistically principled and is built interactively in a top-down fashion using the EM algorithm. It enables the user to interactively highlight those data in the parent visualization plot which are captured by a child model. We also incorporate into our system a hierarchical, locally selective representation of magnification factors and directional curvatures of the projection manifolds. Such information is important for further refinement of the hierarchical visualization plot, as well as for controlling the amount of regularization imposed on the local models. We demonstrate the principle of the approach on a toy data set and apply our system to two more complex 12- and 19-dimensional data sets.

Hierarchical GTM: constructing localized non-linear projection manifolds in a principled way

It has been argued that a single two-dimensional visualization plot may not be sufficient to capture all of the interesting aspects of complex data sets, and therefore a hierarchical visualization system is desirable. In this paper we extend an existing locally linear hierarchical visualization system PhiVis ¸iteBishop98a in several directions: bf(1) We allow for em non-linear projection manifolds. The basic building block is the Generative Topographic Mapping (GTM). bf(2) We introduce a general formulation of hierarchical probabilistic models consisting of local probabilistic models organized in a hierarchical tree. General training equations are derived, regardless of the position of the model in the tree. bf(3) Using tools from differential geometry we derive expressions for local directional curvatures of the projection manifold. Like PhiVis, our system is statistically principled and is built interactively in a top-down fashion using the EM algorithm. It enables the user to interactively highlight those data in the ancestor visualization plots which are captured by a child model. We also incorporate into our system a hierarchical, locally selective representation of magnification factors and directional curvatures of the projection manifolds. Such information is important for further refinement of the hierarchical visualization plot, as well as for controlling the amount of regularization imposed on the local models. We demonstrate the principle of the approach on a toy data set and apply our system to two more complex 12- and 18-dimensional data sets.

A principled approach to interactive hierarchical non-linear visualization of high-dimensional data

Hierarchical visualization systems are desirable because a single two-dimensional visualization plot may not be sufficient to capture all of the interesting aspects of complex high-dimensional data sets. We extend an existing locally linear hierarchical visualization system PhiVis [1] in several directions: bf(1) we allow for em non-linear projection manifolds (the basic building block is the Generative Topographic Mapping -- GTM), bf(2) we introduce a general formulation of hierarchical probabilistic models consisting of local probabilistic models organized in a hierarchical tree, bf(3) we describe folding patterns of low-dimensional projection manifold in high-dimensional data space by computing and visualizing the manifold's local directional curvatures. Quantities such as magnification factors [3] and directional curvatures are helpful for understanding the layout of the nonlinear projection manifold in the data space and for further refinement of the hierarchical visualization plot. Like PhiVis, our system is statistically principled and is built interactively in a top-down fashion using the EM algorithm. We demonstrate the visualization system principle of the approach on a complex 12-dimensional data set and mention possible applications in the pharmaceutical industry.