Does bounded rationality lead to individual heterogeneity? The impact of the experimentation process and of memory constraints

In this paper we explore the effect of bounded rationality on the convergence of individual behavior toward equilibrium. In the context of a Cournot game with a unique and symmetric Nash equilibrium, firms are modeled as adaptive economic agents through a genetic algorithm. Computational experiments show that (1) there is remarkable heterogeneity across identical but boundedly rational agents; (2) such individual heterogeneity is not simply a consequence of the random elements contained in the genetic algorithm; (3) the more rational agents are in terms of memory abilities and pre-play evaluation of strategies, the less heterogeneous they are in their actions. At the limit case of full rationality, the outcome converges to the standard result of uniform individual behavior.

Memory in contracts: the experience of the EBRD (1991-2003)

The objective of this paper is to identify the role of memory in repeated contracts with moral hazard in financial intermediation. We use the database we have built containing the contracts signed by the European Bank for Reconstruction and Development EBRD between 1991 and 2003. Our framework is a standard setting of repeated moral hazard. After having controlled for the adverse selection component, we are able to prove that client reputation is the discrimination device according to which the bank fixes the amount of credit for the established clients. Our results unambiguously isolate the effect of memory in the bank's lending decisions.

Memory of Recessions

This paper reviews the evidence on the effects of recessions on potential output. In contrast to the assumption in mainstream macroeconomic models that economic fluctuations do not change potential output paths, the evidence is that they do in the case of recessions. A model is proposed to explain this phenomenon, based on an analogy with water flows in porous media. Because of the discrete adjustments made by heterogeneous economic agents in such a world, potential output displays hysteresis with regard to aggregate demand shocks, and thus retains a memory of the shocks associated with recessions.

A test of long memory hypothesis based on self-similarity

This paper develops a new test of true versus spurious long memory, based on log-periodogram estimation of the long memory parameter using skip-sampled data. A correction factor is derived to overcome the bias in this estimator due to aliasing. The procedure is designed to be used in the context of a conventional test of significance of the long memory parameter, and composite test procedure described that has the properties of known asymptotic size and consistency. The test is implemented using the bootstrap, with the distribution under the null hypothesis being approximated using a dependent-sample bootstrap technique to approximate short-run dependence following fractional differencing. The properties of the test are investigated in a set of Monte Carlo experiments. The procedure is illustrated by applications to exchange rate volatility and dividend growth series.

Repeating with the right hemisphere: reduced interactions between phonological and lexical-semantic systems in crossed aphasia?

Knowledge on the patterns of repetition amongst individuals who develop language deficits in association with right hemisphere lesions (crossed aphasia) is very limited. Available data indicate that repetition in some crossed aphasics experiencing phonological processing deficits is not heavily influenced by lexical-semantic variables (lexicality, imageability, and frequency) as is regularly reported in phonologically-impaired cases with left hemisphere damage. Moreover, in view of the fact that crossed aphasia is rare, information on the role of right cortical areas and white matter tracts underpinning language repetition deficits is scarce. In this study, repetition performance was assessed in two patients with crossed conduction aphasia and striatal/capsular vascular lesions encompassing the right arcuate fasciculus (AF) and inferior frontal-occipital fasciculus (IFOF), the temporal stem and the white matter underneath the supramarginal gyrus. Both patients showed lexicality effects repeating better words than non-words, but manipulation of other lexical-semantic variables exerted less influence on repetition performance. Imageability and frequency effects, production of meaning-based paraphrases during sentence repetition, or better performance on repeating novel sentences than overlearned clichés were hardly ever observed in these two patients. In one patient, diffusion tensor imaging disclosed damage to the right long direct segment of the AF and IFOF with relative sparing of the anterior indirect and posterior segments of the AF, together with fully developed left perisylvian white matter pathways. These findings suggest that striatal/capsular lesions extending into the right AF and IFOF in some individuals with right hemisphere language dominance are associated with atypical repetition patterns which might reflect reduced interactions between phonological and lexical-semantic processes.

The Biblioteca de Catalunya: working for the present and the future

The Biblioteca de Catalunya (BC) was created in 1907 by the Institut d’Estudis Catalans (IEC). In 1914 the Mancomunitat de Catalunya gave the library its condition of cultural and public service, open to researchers and scholars. The library underwent several changes as a consequence of political events, along the most of 20th century. In 1981 it was recognized by law as national library and it recovered its foundational aim of gathering, preserving and disseminating the bibliographical output of Catalonia and the production related with the Catalan linguistic field. As the proud host of ANADP2, the BC wants to show the attendees to the conference how, since 2004, has positioned itself to face the challenge of the new informational and technological paradigm. The library strategy for oncoming years includes giving open and free access online to the digitization of many of his collections through the portals MDC (Digital Memory of Catalonia), ARCA (Old Catalan Serials Archive) and Google Books project; the creation of the Web Archive of Catalonia and, as the last step in the consolidation of its policy, a high-security preserving repository named COFRE, based on the international guidelines and initiatives and the experience of the BC itself.

Identification of the regions involved in phonological assembly using a novel paradigm.

Here we adopt a novel strategy to investigate phonological assembly. Participants performed a visual lexical decision task in English in which the letters in words and letterstrings were delivered either sequentially (promoting phonological assembly) or simultaneously (not promoting phonological assembly). A region of interest analysis confirmed that regions previously associated with phonological assembly, in studies contrasting different word types (e.g. words versus pseudowords), were also identified using our novel task that controls for a number of confounding variables. Specifically, the left pars opercularis, the superior part of the ventral precentral gyrus and the supramarginal gyrus were all recruited more during sequential delivery than simultaneous delivery, even when various psycholinguistic characteristics of the stimuli were controlled. This suggests that sequential delivery of orthographic stimuli is a useful tool to explore how readers, with various levels of proficiency, use sublexical phonological processing during visual word recognition.

Memory and power : two movements

The institutions that work with the preservation and diffusion of cultural heritage - be them archive, libraries, museums, art galleries or cultural centres - present a certain discourse about reality. To understand this discourse, composed by sound and silence, by fullness and emptiness, by presence and absence, by remembrance and forgetting, an operation is implied, not only with the enunciation of speech and its gaps, but also the comprehension of that which causes to speak, of who is speaking and of the point whence one speaks. Preservation and destruction, or, in another way, conservation and loss, walk hand in hand in the arteries of life. As suggested by Nietzsche (1999, p.273), it is impossible to live without loss, it is entirely impossible to live avoiding destruction to play its game and drive the dynamics of life on. However, by means of a kind of tautological argument, one often justifies preservation by the imminence of loss and memory by the threat of forgetting. Thus, one ceases to consider that the game and the rules of the game between forgetting and memory are not fed by themselves and that preservation and destruction are not opposed in a deadly duel, but instead they complement one another and are always at the service of subjects that build themselves and are built through social practices. To indicate that memories and forgettings can be sown and cultivated corroborates the importance of working towards the denaturalisation of these concepts and towards the understanding that they result from a construction process also involving other forces, such as: power. Power is a sower, a promoter of memories and forgettings.

Transfer across form and modality in implicit and explicit memory

Three experiments examined transfer across form (words/pictures) and modality (visual/ auditory) in written word, auditory word, and pictorial implicit memory tests, as well as on a free recall task. Experiment 1 showed no significant transfer across form on any of the three implicit memory tests,and an asymmetric pattern of transfer across modality. In contrast, the free recall results revealed a very different picture. Experiment 2 further investigated the asymmetric modality effects obtained for the implicit memory measures by employing articulatory suppression and picture naming to control the generation of phonological codes. Finally, Experiment 3 examined the effects of overt word naming and covert picture labelling on transfer between study and test form. The results of the experiments are discussed in relation to Tulving and Schacter's (1990) Perceptual Representation Systems framework and Roediger's (1990) Transfer Appropriate Processing theory.

Modeling distributions of immediate memory effects: No strategies needed?

Many models of immediate memory predict the presence or absence of various effects, but none have been tested to see whether they predict an appropriate distribution of effect sizes. The authors show that the feature model (J. S. Nairne, 1990) produces appropriate distributions of effect sizes for both the phonological confusion effect and the word-length effect. The model produces the appropriate number of reversals, when participants are more accurate with similar items or long items, and also correctly predicts that participants performing less well overall demonstrate smaller and less reliable phonological similarity and word-length effects and are more likely to show reversals. These patterns appear within the model without the need to assume a change in encoding or rehearsal strategy or the deployment of a different storage buffer. The implications of these results and the wider applicability of the distributionmodeling approach are discussed.

Preliterate phonological awareness and early literacy skills in Turkish

The role of preschool phonological awareness in early reading and spelling skills was investigated in the transparent orthography of Turkish. Fifty-six preschool children (mean age=5.6 years) were followed into Grade 2 (mean age=7.6 years). While preschool phonological awareness failed to make any reliable contribution to future reading skills, it was the strongest longitudinal correlate of spelling skills measured at the end of Grades 1 and 2. Overall findings suggested that phonological awareness may be differentially related to reading and spelling, and that spelling is a more sensitive index of phonological processing skills. In this study, verbal short-term memory emerged as the most powerful and consistent longitudinal correlate of reading speed. This finding raised important questions about the component processes of reading speed, and the role of memory and morphosyntactic skills in an agglutinative and transparent orthography such as Turkish.

Redintegration and lexicality effects in children: do they depend upon the demands of the memory task?

The effect of long-term knowledge upon performance in short-term memory tasks was examined for children from 5 to 10 years of age. The emergence of a lexicality effect, in which familiar words were recalled more accurately than unfamiliar words, was found to depend upon the nature of the memory task. Lexicality effects were interpreted as reflecting the use of redintegration, or reconstruction processes, in short-term memory. Redintegration increased with age for tasks requiring spoken item recall and decreased with age when position information but not naming was required. In a second experiment, redintegration was found in a recognition task when some of the foils rhymed with the target. Older children were able to profit from a rhyming foil, whereas younger children were confused by it, suggesting that the older children make use of sublexical phonological information in reconstructing the target. It was proposed that redintegrative processes in their mature form support the reconstruction of detailed phonological knowledge of words.

Phonological similarity effects without a phonological store: an individual differences model

The feature model of immediate memory (Nairne, 1990) is applied to an experiment testing individual differences in phonological confusions amongst a group (N=100) of participants performing a verbal memory test. By simulating the performance of an equivalent number of “pseudo-participants” the model fits both the mean performance and the variability within the group. Experimental data show that high-performing individuals are significantly more likely to demonstrate phonological confusions than low performance individuals and this is also true of the model, despite the model’s lack of either an explicit phonological store or a performance-linked strategy shift away from phonological storage. It is concluded that a dedicated phonological store is not necessary to explain the basic phonological confusion effect, and the reduction in such an effect can also be explained without requiring a change in encoding or rehearsal strategy or the deployment of a different storage buffer.

A note on Chambers's "long memory and aggregation in macroeconomic time series"

Chambers (1998) explores the interaction between long memory and aggregation. For continuous-time processes, he takes the aliasing effect into account when studying temporal aggregation. For discrete-time processes, however, he seems to fail to do so. This note gives the spectral density function of temporally aggregated long memory discrete-time processes in light of the aliasing effect. The results are different from those in Chambers (1998) and are supported by a small simulation exercise. As a result, the order of aggregation may not be invariant to temporal aggregation, specifically if d is negative and the aggregation is of the stock type.

Robustness of stationary tests under long-memory alternatives

This paper investigates the presence of long memory in financiaI time series using four test statistics: V/S, KPSS, KS and modified R/S. There has been a large amount of study on the long memory behavior in economic and financiaI time series. However, there is still no consensus. We argue in this paper that spurious short-term memory may be found due to the incorrect use of data-dependent bandwidth to estimating the longrun variance. We propose a partially adaptive lag truncation procedure that is robust against the presence of long memory under the alternative hypothesis and revisit several economic and financiaI time series using the proposed bandwidth choice. Our results indicate the existence of spurious short memory in real exchange rates when Andrews' formula is employed, but long memory is detected when the proposed lag truncation procedure is used. Using stock market data, we also found short memory in returns and long memory in volatility.