Applying qualitative reasoning to finance

Qualitative reasoning has traditionally been applied in the domain of physical systems, where there are well established and understood laws governing the behaviour of each `component' in the system. Such application has shown that it is possible to produce models which can be used for explaining and predicting the behaviour of physical phenomena and also trouble-shooting. The principles underlying the theory ensure that the models are robust and exhibit consistent behaviour under all conditions. This research examines the validity of applying the theory in the financial domain where such laws may not exist or if they do, may not be universally applicable. In particular, it investigates how far these principles and techniques may be applied in the construction of financial analysis models. Because of the inherent differences in the nature of these two domains, it is argued that a different qualitative value system ought to be employed. The dissertation enlarges on the constraints this places on model descriptions and the effect it may have on the power and usefulness of the resulting models. It also describes the implementation of a system that investigates the implications of applying this theory by way of testing it on situations drawn from both text-books and published financial information.

Towards Qualitative Approaches to Bayesian Evidential Reasoning

A crucial aspect of evidential reasoning in crime investigation involves comparing the support that evidence provides for alternative hypotheses. Recent work in forensic statistics has shown how Bayesian Networks (BNs) can be employed for this purpose. However, the specification of BNs requires conditional probability tables describing the uncertain processes under evaluation. When these processes are poorly understood, it is necessary to rely on subjective probabilities provided by experts. Accurate probabilities of this type are normally hard to acquire from experts. Recent work in qualitative reasoning has developed methods to perform probabilistic reasoning using coarser representations. However, the latter types of approaches are too imprecise to compare the likelihood of alternative hypotheses. This paper examines this shortcoming of the qualitative approaches when applied to the aforementioned problem, and identifies and integrates techniques to refine them.

On Qualitative Probabilities for Legal Reasoning about Evidence

A crucial aspect of evidential reasoning in crime investigation involves comparing the support that evidence provides for alternative hypotheses. Recent work in forensic statistics has shown how Bayesian Networks (BNs) can be employed for this purpose. However, the specification of BNs requires conditional probability tables describing the uncertain processes under evaluation. When these processes are poorly understood, it is necessary to rely on subjective probabilities provided by experts. Accurate probabilities of this type are normally hard to acquire from experts. Recent work in qualitative reasoning has developed methods to perform probabilistic reasoning using coarser representations. However, the latter types of approaches are too imprecise to compare the likelihood of alternative hypotheses. This paper examines this shortcoming of the qualitative approaches when applied to the aforementioned problem, and identifies and integrates techniques to refine them.

Framework development for providing accessibility to qualitative spatial calculi

Dissertation submitted in partial fulfillment of the requirements for the Degree of Master of Science in Geospatial Technologies.

Model-based diagnosis system: application to constructed wetlands

Report for the scientific sojourn carried out at the Model-based Systems and Qualitative Reasoning Group (Technical University of Munich), from September until December 2005. Constructed wetlands (CWs), or modified natural wetlands, are used all over the world as wastewater treatment systems for small communities because they can provide high treatment efficiency with low energy consumption and low construction, operation and maintenance costs. Their treatment process is very complex because it includes physical, chemical and biological mechanisms like microorganism oxidation, microorganism reduction, filtration, sedimentation and chemical precipitation. Besides, these processes can be influenced by different factors. In order to guarantee the performance of CWs, an operation and maintenance program must be defined for each Wastewater Treatment Plant (WWTP). The main objective of this project is to provide a computer support to the definition of the most appropriate operation and maintenance protocols to guarantee the correct performance of CWs. To reach them, the definition of models which represent the knowledge about CW has been proposed: components involved in the sanitation process, relation among these units and processes to remove pollutants. Horizontal Subsurface Flow CWs are chosen as a case study and the filtration process is selected as first modelling-process application. However, the goal is to represent the process knowledge in such a way that it can be reused for other types of WWTP.

Embedding objects into Matlab/Simulink for process supervision

This paper introduces how artificial intelligence technologies can be integrated into a known computer aided control system design (CACSD) framework, Matlab/Simulink, using an object oriented approach. The aim is to build a framework to aid supervisory systems analysis, design and implementation. The idea is to take advantage of an existing CACSD framework, Matlab/Simulink, so that engineers can proceed: first to design a control system, and then to design a straightforward supervisory system of the control system in the same framework. Thus, expert systems and qualitative reasoning tools are incorporated into this popular CACSD framework to develop a computer aided supervisory system design (CASSD) framework. Object-variables an introduced into Matlab/Simulink for sharing information between tools

A logic programming framework for possibilistic argumentation: formalization and logical properties

In the last decade defeasible argumentation frameworks have evolved to become a sound setting to formalize commonsense, qualitative reasoning. The logic programming paradigm has shown to be particularly useful for developing different argument-based frameworks on the basis of different variants of logic programming which incorporate defeasible rules. Most of such frameworks, however, are unable to deal with explicit uncertainty, nor with vague knowledge, as defeasibility is directly encoded in the object language. This paper presents Possibilistic Logic Programming (P-DeLP), a new logic programming language which combines features from argumentation theory and logic programming, incorporating as well the treatment of possibilistic uncertainty. Such features are formalized on the basis of PGL, a possibilistic logic based on G¨odel fuzzy logic. One of the applications of P-DeLP is providing an intelligent agent with non-monotonic, argumentative inference capabilities. In this paper we also provide a better understanding of such capabilities by defining two non-monotonic operators which model the expansion of a given program P by adding new weighed facts associated with argument conclusions and warranted literals, respectively. Different logical properties for the proposed operators are studied

Parallella, dynamiska representationer i gymnasiefysiken : implementering av ett interaktivt datorverktyg i didaktiska situationer och uppfattning av effektivt lärande

The computer is a useful tool in the teaching of upper secondary school physics, and should not have a subordinate role in students' learning process. However, computers and computer-based tools are often not available when they could serve their purpose best in the ongoing teaching. Another problem is the fact that commercially available tools are not usable in the way the teacher wants. The aim of this thesis was to try out a novel teaching scenario in a complicated subject in physics, electrodynamics. The didactic engineering of the thesis consisted of developing a computer-based simulation and training material, implementing the tool in physics teaching and investigating its effectiveness in the learning process. The design-based research method, didactic engineering (Artigue, 1994), which is based on the theoryof didactical situations (Brousseau, 1997), was used as a frame of reference for the design of this type of teaching product. In designing the simulation tool a general spreadsheet program was used. The design was based on parallel, dynamic representations of the physics behind the function of an AC series circuit in both graphical and numerical form. The tool, which was furnished with possibilities to control the representations in an interactive way, was hypothesized to activate the students and promote the effectiveness of their learning. An effect variable was constructed in order to measure the students' and teachers' conceptions of learning effectiveness. The empirical study was twofold. Twelve physics students, who attended a course in electrodynamics in an upper secondary school, participated in a class experiment with the computer-based tool implemented in three modes of didactical situations: practice, concept introduction and assessment. The main goal of the didactical situations was to have students solve problems and study the function of AC series circuits, taking responsibility for theirown learning process. In the teacher study eighteen Swedish speaking physics teachers evaluated the didactic potential of the computer-based tool and the accompanying paper-based material without using them in their physics teaching. Quantitative and qualitative data were collected using questionnaires, observations and interviews. The result of the studies showed that both the group of students and the teachers had generally positive conceptions of learning effectiveness. The students' conceptions were more positive in the practice situation than in the concept introduction situation, a setting that was more explorative. However, it turned out that the students' conceptions were also positive in the more complex assessment situation. This had not been hypothesized. A deeper analysis of data from observations and interviews showed that one of the students in each pair was more active than the other, taking more initiative and more responsibilityfor the student-student and student-computer interaction. These active studentshad strong, positive conceptions of learning effectiveness in each of the threedidactical situations. The group of less active students had a weak but positive conception in the first iv two situations, but a negative conception in the assessment situation, thus corroborating the hypothesis ad hoc. The teacher study revealed that computers were seldom used in physics teaching and that computer programs were in short supply. The use of a computer was considered time-consuming. As long as physics teaching with computer-based tools has to take place in special computer rooms, the use of such tools will remain limited. The affordance is enhanced when the physical dimensions as well as the performance of the computer are optimised. As a consequence, the computer then becomes a real learning tool for each pair of students, smoothly integrated into the ongoing teaching in the same space where teaching normally takes place. With more interactive support from the teacher, the computer-based parallel, dynamic representations will be efficient in promoting the learning process of the students with focus on qualitative reasoning - an often neglected part of the learning process of the students in upper secondary school physics.

Une approche conceptuelle pour l’interprétation des graphiques en cinématique au secondaire

Cette recherche tente de déterminer si, dans le cadre d’un cours de physique de cinquième secondaire, l’utilisation d’un laboratoire par enquête guidée (comme complément d’enseignement basé sur une approche conceptuelle) permet aux élèves de mieux comprendre des notions de cinématique, que le laboratoire traditionnel. Elle s’inscrit dans une série d’études, réalisées au collégial ou à l’université, qui portent sur des approches d’enseignement exploitant le laboratoire comme moyen de transmission des concepts mécaniques en physique (McDermott, 1996; Beichner, 1994). Le laboratoire par enquête est associé à une approche conceptuelle axée sur le raisonnement qualitatif alors que celui qui est traditionnel est associé à une approche traditionnelle de l’enseignement de la physique. Le test TUG-K, «Test of Understanding Graphs in Kinematics » (Beichner, 1994), ainsi que des entrevues individuelles ont été utilisés afin d’évaluer la compréhension des concepts de cinématique. Il semble d’abord que le laboratoire par enquête guidé soit efficace pour enseigner la plupart des notions de cinématique. De plus, en comparant deux groupes d’une trentaine d’élèves de 5e secondaire ayant suivi deux types de laboratoires différents, l’étude a permis d’entrevoir une piste concernant la compréhension du concept d’accélération. Les résultats suggèrent qu’un laboratoire associé à une approche conceptuelle permettrait aux étudiants, à long terme, de mieux s’approprier les notions d’accélération qu’un laboratoire traditionnel.

KAM: Automatic Planning and Interpretation of Numerical Experiments Using Geometrical Methods

KAM is a computer program that can automatically plan, monitor, and interpret numerical experiments with Hamiltonian systems with two degrees of freedom. The program has recently helped solve an open problem in hydrodynamics. Unlike other approaches to qualitative reasoning about physical system dynamics, KAM embodies a significant amount of knowledge about nonlinear dynamics. KAM's ability to control numerical experiments arises from the fact that it not only produces pictures for us to see, but also looks at (sic---in its mind's eye) the pictures it draws to guide its own actions. KAM is organized in three semantic levels: orbit recognition, phase space searching, and parameter space searching. Within each level spatial properties and relationships that are not explicitly represented in the initial representation are extracted by applying three operations ---(1) aggregation, (2) partition, and (3) classification--- iteratively.

Embedding objects into Matlab/Simulink for process supervision

This paper introduces how artificial intelligence technologies can be integrated into a known computer aided control system design (CACSD) framework, Matlab/Simulink, using an object oriented approach. The aim is to build a framework to aid supervisory systems analysis, design and implementation. The idea is to take advantage of an existing CACSD framework, Matlab/Simulink, so that engineers can proceed: first to design a control system, and then to design a straightforward supervisory system of the control system in the same framework. Thus, expert systems and qualitative reasoning tools are incorporated into this popular CACSD framework to develop a computer aided supervisory system design (CASSD) framework. Object-variables an introduced into Matlab/Simulink for sharing information between tools

Legal LEGO: Model based computer assisted teaching in evidence courses

This paper describes the development of a new approach to the use of ICT for the teaching of courses in the interpretation and evaluation of evidence. It is based on ideas developed for the teaching of science to school children, in particular the importance of models and qualitative reasoning skills. In the first part, we make an analysis of the basis of current research into “evidence scholarship” and the demands such a system would have to meet. In the second part, we introduce the details of such a system that we developed initially to assist police in the interpretation of evidence.