Belief Propagation and Revision in Networks with Loops

Local belief propagation rules of the sort proposed by Pearl(1988) are guaranteed to converge to the optimal beliefs for singly connected networks. Recently, a number of researchers have empirically demonstrated good performance of these same algorithms on networks with loops, but a theoretical understanding of this performance has yet to be achieved. Here we lay the foundation for an understanding of belief propagation in networks with loops. For networks with a single loop, we derive ananalytical relationship between the steady state beliefs in the loopy network and the true posterior probability. Using this relationship we show a category of networks for which the MAP estimate obtained by belief update and by belief revision can be proven to be optimal (although the beliefs will be incorrect). We show how nodes can use local information in the messages they receive in order to correct the steady state beliefs. Furthermore we prove that for all networks with a single loop, the MAP estimate obtained by belief revisionat convergence is guaranteed to give the globally optimal sequence of states. The result is independent of the length of the cycle and the size of the statespace. For networks with multiple loops, we introduce the concept of a "balanced network" and show simulati.

A Unified Framework for Regularization Networks and Support Vector Machines

Regularization Networks and Support Vector Machines are techniques for solving certain problems of learning from examples -- in particular the regression problem of approximating a multivariate function from sparse data. We present both formulations in a unified framework, namely in the context of Vapnik's theory of statistical learning which provides a general foundation for the learning problem, combining functional analysis and statistics.

A Nonparametric Approach to Pricing and Hedging Derivative Securities via Learning Networks

We propose a nonparametric method for estimating derivative financial asset pricing formulae using learning networks. To demonstrate feasibility, we first simulate Black-Scholes option prices and show that learning networks can recover the Black-Scholes formula from a two-year training set of daily options prices, and that the resulting network formula can be used successfully to both price and delta-hedge options out-of-sample. For comparison, we estimate models using four popular methods: ordinary least squares, radial basis functions, multilayer perceptrons, and projection pursuit. To illustrate practical relevance, we also apply our approach to S&P 500 futures options data from 1987 to 1991.

Social network measures for "nosduocentered" networks, their predictive power on performance

Our purpose in this article is to define a network structure which is based on two egos instead of the egocentered (one ego) or the complete network (n egos). We describe the characteristics and properties for this kind of network which we call “nosduocentered network”, comparing it with complete and egocentered networks. The key point for this kind of network is that relations exist between the two main egos and all alters, but relations among others are not observed. After that, we use new social network measures adapted to the nosduocentered network, some of which are based on measures for complete networks such as degree, betweenness, closeness centrality or density, while some others are tailormade for nosduocentered networks. We specify three regression models to predict research performance of PhD students based on these social network measures for different networks such as advice, collaboration, emotional support and trust. Data used are from Slovenian PhD students and their s