Individual Decision-Making and Inflation Persistence

The traditional task of a central bank is to preserve price stability and, in doing so, not to impair the real economy more than necessary. To meet this challenge, it is of great relevance whether inflation is only driven by inflation expectations and the current output gap or whether it is, in addition, influenced by past inflation. In the former case, as described by the New Keynesian Phillips curve, the central bank can immediately and simultaneously achieve price stability and equilibrium output, the so-called ‘divine coincidence’ (Blanchard and Galí 2007). In the latter case, the achievement of price stability is costly in terms of output and will be pursued over several periods. Similarly, it is important to distinguish this latter case, which describes ‘intrinsic’ inflation persistence, from that of ‘extrinsic’ inflation persistence, where the sluggishness of inflation is not a ‘structural’ feature of the economy but merely ‘inherited’ from the sluggishness of the other driving forces, inflation expectations and output. ‘Extrinsic’ inflation persistence is usually considered to be the less challenging case, as policy-makers are supposed to fight against the persistence in the driving forces, especially to reduce the stickiness of inflation expectations by a credible monetary policy, in order to reestablish the ‘divine coincidence’. The scope of this dissertation is to contribute to the vast literature and ongoing discussion on inflation persistence: Chapter 1 describes the policy consequences of inflation persistence and summarizes the empirical and theoretical literature. Chapter 2 compares two models of staggered price setting, one with a fixed two-period duration and the other with a stochastic duration of prices. I show that in an economy with a timeless optimizing central bank the model with the two-period alternating price-setting (for most parameter values) leads to more persistent inflation than the model with stochastic price duration. This result amends earlier work by Kiley (2002) who found that the model with stochastic price duration generates more persistent inflation in response to an exogenous monetary shock. Chapter 3 extends the two-period alternating price-setting model to the case of 3- and 4-period price durations. This results in a more complex Phillips curve with a negative impact of past inflation on current inflation. As simulations show, this multi-period Phillips curve generates a too low degree of autocorrelation and too early turnings points of inflation and is outperformed by a simple Hybrid Phillips curve. Chapter 4 starts from the critique of Driscoll and Holden (2003) on the relative real-wage model of Fuhrer and Moore (1995). While taking the critique seriously that Fuhrer and Moore’s model will collapse to a much simpler one without intrinsic inflation persistence if one takes their arguments literally, I extend the model by a term for inequality aversion. This model extension is not only in line with experimental evidence but results in a Hybrid Phillips curve with inflation persistence that is observably equivalent to that presented by Fuhrer and Moore (1995). In chapter 5, I present a model that especially allows to study the relationship between fairness attitudes and time preference (impatience). In the model, two individuals take decisions in two subsequent periods. In period 1, both individuals are endowed with resources and are able to donate a share of their resources to the other individual. In period 2, the two individuals might join in a common production after having bargained on the split of its output. The size of the production output depends on the relative share of resources at the end of period 1 as the human capital of the individuals, which is built by means of their resources, cannot fully be substituted one against each other. Therefore, it might be rational for a well-endowed individual in period 1 to act in a seemingly ‘fair’ manner and to donate own resources to its poorer counterpart. This decision also depends on the individuals’ impatience which is induced by the small but positive probability that production is not possible in period 2. As a general result, the individuals in the model economy are more likely to behave in a ‘fair’ manner, i.e., to donate resources to the other individual, the lower their own impatience and the higher the productivity of the other individual. As the (seemingly) ‘fair’ behavior is modelled as an endogenous outcome and as it is related to the aspect of time preference, the presented framework might help to further integrate behavioral economics and macroeconomics.

Contact Sensing: A Sequential Decision Approach to Sensing Manipulation Contact

This paper describes a new statistical, model-based approach to building a contact state observer. The observer uses measurements of the contact force and position, and prior information about the task encoded in a graph, to determine the current location of the robot in the task configuration space. Each node represents what the measurements will look like in a small region of configuration space by storing a predictive, statistical, measurement model. This approach assumes that the measurements are statistically block independent conditioned on knowledge of the model, which is a fairly good model of the actual process. Arcs in the graph represent possible transitions between models. Beam Viterbi search is used to match measurement history against possible paths through the model graph in order to estimate the most likely path for the robot. The resulting approach provides a new decision process that can be use as an observer for event driven manipulation programming. The decision procedure is significantly more robust than simple threshold decisions because the measurement history is used to make decisions. The approach can be used to enhance the capabilities of autonomous assembly machines and in quality control applications.

Searching for consensus in ahp-group decision making. A bayesian perspective

This paper sets out to identify the initial positions of the different decision makers who intervene in a group decision making process with a reduced number of actors, and to establish possible consensus paths between these actors. As a methodological support, it employs one of the most widely-known multicriteria decision techniques, namely, the Analytic Hierarchy Process (AHP). Assuming that the judgements elicited by the decision makers follow the so-called multiplicative model (Crawford and Williams, 1985; Altuzarra et al., 1997; Laininen and Hämäläinen, 2003) with log-normal errors and unknown variance, a Bayesian approach is used in the estimation of the relative priorities of the alternatives being compared. These priorities, estimated by way of the median of the posterior distribution and normalised in a distributive manner (priorities add up to one), are a clear example of compositional data that will be used in the search for consensus between the actors involved in the resolution of the problem through the use of Multidimensional Scaling tools

Group preference structures in AHP–group decision making

This paper presents a procedure that allows us to determine the preference structures (PS) associated to each of the different groups of actors that can be identified in a group decision making problem with a large number of individuals. To that end, it makes use of the Analytic Hierarchy Process (AHP) (Saaty, 1980) as the technique to solve discrete multicriteria decision making problems. This technique permits the resolution of multicriteria, multienvironment and multiactor problems in which subjective aspects and uncertainty have been incorporated into the model, constructing ratio scales corresponding to the priorities relative to the elements being compared, normalised in a distributive manner (wi = 1). On the basis of the individuals’ priorities we identify different clusters for the decision makers and, for each of these, the associated preference structure using, to that end, tools analogous to those of Multidimensional Scaling. The resulting PS will be employed to extract knowledge for the subsequent negotiation processes and, should it be necessary, to determine the relative importance of the alternatives being compared using anyone of the existing procedures

Procesamiento lexical en pacientes con lesiones cerebrales : un estudio de la denominación.

Estudio del comportamiento de pacientes con lesiones corticales contridas fundamentalmente de origen neoplásico vascular o traumático, analizando la comprensión del lenguaje en la entrada auditiva y en su comprensión verbal, centrándose en las pruebas de denominación. La muestra la componen 50 sujetos divididos en 5 grupos. Primer grupo: 10 pacientes afásicos con lesiones del hemisferio izquierdo. Segundo grupo: 10 pacientes con lesiones del hemisferio izquierdo. Tercer grupo: 10 pacientes con lesiones del hemisferio derecho. Cuarto grupo: 10 sujetos adultos sin patologías en el sistema nervioso. Quinto grupo: 10 niños con edades entre 5 y 8 ocho años sin patologías en el sistema central y sin problemas escolares. En base al modelo de Caramazza, Berndt y Browell (1982) se analiza la denominación en relación a la modalidad sensorial de entrada, la cantidad de información y la categoría semántica. Se localizan las estructuras cerebrales que se encuentran fundamentalmente dañadas. Se relaciona finalmente la denominación con la clasificación de las afasias, la lateralización hemisférica de funciones y la base neuroanatómica lesionada. Pruebas clínicas de denominación. Diseños factoriales mixtos, con el primer factor entre grupos y con el resto de los factores de medidas repetidas -estos últimos cambian-. Se ha realizado transformación al arcoseno de la variable dependiente y ajustes en proporciones siguiendo el método propuesto por Snedecor y Cochran. Se han realizado los correspondientes análisis de varianza. Desajuste de los niveles de análisis entre la neuropsicología tradicional y la psicología cognitiva actual. Importancia de las modalidades sensoriales a presentación, cantidad de información y categoría semántica en la denominación. Peor ejecución de los pacientes con lesiones en el hemisferio derecho, interpretado como un problema en el procesamiento en las etapas iniciales. No existe un paralelismo de pacientes afásicos y el grupo infantil. Este último se asemeja al grupo control de adultos. Confección de un mapa de localización de la corteza cerebral que cuando se lesiona puede sufrir trastornos en la denominación. Esta capacidad se realiza fundamentalmente en el giro temporal superior de hemisferio izquierdo. El marco teórico que puede adoptarse para el estudio de la denominación es el de los modelos de producción verbal. La clasificación de las afasias en tareas debe cambiar en componentes de las mismas.

Use of decision trees in colour feature selection: application to object recognition in outdoor scenes

A new method for the automated selection of colour features is described. The algorithm consists of two stages of processing. In the first, a complete set of colour features is calculated for every object of interest in an image. In the second stage, each object is mapped into several n-dimensional feature spaces in order to select the feature set with the smallest variables able to discriminate the remaining objects. The evaluation of the discrimination power for each concrete subset of features is performed by means of decision trees composed of linear discrimination functions. This method can provide valuable help in outdoor scene analysis where no colour space has been demonstrated as being the most suitable. Experiment results recognizing objects in outdoor scenes are reported

Training and pre-decisional bias in a multiattribute decision task. 'Formaci??n y sesgo pre-decisional en una tarea de decisi??n multiatributiva'

Resumen tomado de la publicaci??n

Regression-based techniques for statistical decision making in singlecase designs

Resumen tomado de la publicaci??n

Decision analysis exercises

Exercises and solutions in LaTex

Decision analysis exercises pdf

Exercises and solutions in PDF

Behind the decision making of the KFC coffee campaign, can KFC win the coffee market in UK?�

KFC, the chain fast-food restaurants in UK, planed to launched coffee products through campaigns. There are two main reasons for KFC to make the decision. The first one is KFC tried to promote its coffee products with KFC A.M. breakfast plan and it failed at last. The second reason is that KFC needs extension points of interest. The financial condition of KFC has been steady but no breakthrough growth. It has been showed that there is enormous potential of “fast-drink” market in UK. After the success of KFC “Krushems” series, it is reasonable for the company launched coffee products. However, KFC also faced to many challenges to win the market. Compare to the main competitor of McDonald’s, KFC’s quantity of restaurants is far too less. Moreover, KFC has a brand limitation that focuses more family than single urban. The dominant competitors are another challenge KFC need to manage. To sum up, KFC has to win these challenges to be a bigger player in UK coffee market.

Alps Workshop 3 p19 Steps in decision-making

Stepped Animation

Translation of the Decision of the International Court of Justice related to the Case concerning the dispute regarding navigational and related rights (Costa Rica v. Nicaragua) Judgment

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Decision making and planning of children in the reproductive process of males

Reproduction is not restricted to the biological; it is also a complex and dynamic social process. The objective of this paper is to analyze the decision and planning of children as part of the reproductive process in men. Methodologically, a qualitative research was made. The analysis includes in-depth interviews with 30 parents between 20 and 45 years, of medium socio-economic level in México. The results show that the reproductive process incorporates family formation negotiated with their couple the marriage until they had economic potential. In some cases, their decision hastened because the couple was pregnant. The planning was not contemplated but when getting the news, they accept it and get involved in the process, while others see it as a conflict.