Searching Probabilistic Difference-Making within Specificity

The idea that good explanations come with strong changes in probabilities has been very common. This criterion is called probabilistic difference-making. Since it is an intuitive criterion and has a long tradition in the literature on scientific explanation, it comes as a surprise that probabilistic difference-making is rarely discussed in the context of interventionist causal explanation. Specificity, proportionality, and stability are usually employed to measure explanatory power instead. This paper is a first step into the larger project of connecting difference-making to the interventionist debate, and it starts by investigating whether probabilistic difference-making is contained in the notion of specificity. The choice of specificity is motivated by the observation that both probabilistic difference-making and specificity build on similar underlying intuitions. When comparing measures for both specificity and probabilistic difference-making, it turns out that the measures are not strictly correlated, and so the thesis that probabilistic difference-making is encoded within specificity has to be rejected. Some consequences of this result are discussed as well.

Personalization from Customer Data Aggregation Using List Price

When consumers’ inferences of their reservation values are subject to environmental noise, firms can use customer data aggregation to obtain superior knowledge. This facilitates personalized pricing but may also induce consumer suspicions of overpaying. To alleviate the suspicions and convince consumers of their value, the firm may design its personalization scheme to include a list price in addition to the personalized prices. We find that only a separating equilibrium with list pricing survives the intuitive criterion. Specifically, when consumers underestimate their value, it is essential to use a binding list price to inform the consumers about the market’s price ceiling. Contrary to the conventional wisdom, the firm cannot abuse its informational advantage to steer consumers into overestimation, and price discrimination may strictly benefit the consumers who avoid overpaying. This paper was accepted by Dmitri Kuksov, marketing.

Symbolic victories and strategic risk

This article studies the rational side of symbolic victories. It opens with the broad question, why are some battles more significant than others? Extending the literature on bargaining and war, it argues that a belligerent can deliberately increase strategic risk in order to communicate its strength. By increasing the information a battle conveys, the belligerent artificially creates the conditions for a symbolic victory. In short, strategic risk becomes a useful, costly signal. This claim is developed in a formal model in which players choose between more and less dangerous military options. Under most conditions, a symbolic equilibrium exists in which both strong- and weak-type players are able to signal their types after only one round. This equilibrium’s rapid information flow is unusual in the rationalist literature: typically, strong types must wait to signal effectively. The article goes on to establish that, when the prior probability a player is strong is sufficiently small, this symbolic equilibrium uniquely satisfies the intuitive criterion. It then applies the model to two famous episodes from military history, the Doolittle Raid of WWII and the battles of Cannae and Capua of the Second Punic War. For both, it highlights how actors deliberately manipulate strategic risk to communicate with adversaries, allies, and their own publics.

Signalling by Bayesian Persuasion and Pricing Strategy

This article investigates how a privately informed seller could signal her type through Bayesian persuasion and pricing strategy. We find that it is generally impossible to achieve separation through one channel alone. Furthermore, the outcome that survives the intuitive criterion always exists and is unique. This outcome is separating, for which a closed-form solution is provided. The signalling concern forces the high-type seller to disclose inefficiently more information and charge a higher price, resulting in fewer sales and lower profit. Finally, we show that a regulation on minimal quality could potentially hurt social welfare, and private information hurts the seller.

Energy based Design as an Alternative Intuitive Criterion to the Drift Criterion

Structural integrity with smaller structural plan density is doubtful under earthquake loading, while the structure is supposed to undergo inelastic deformation. Recent past damages under moderate earthquakes have raised a lot of questionnaires to the existing seismic design procedures. Drift controlled damage indices are consistently under reappraisal because of our better understanding of dynamic loading. Hence, energy based concept is suggested in an effort to explicate the response of building systems during earthquake loading. In this paper, explicit expressions for various components of energy i.e. strain, kinetic, damping and inelastic energy versus drift have been derived and discussed with the post processing results of building systems under varying strong earthquake motions. The incremental dynamic analysis is used in our study and the results show that the energy criterion analysis gives better one than the drift criterion for the structures subjected to earthquake ground motions.

Genetic Single Neuron Anatomy reveals fine granularity of cortical interneuron subtypes

Parsing diverse nerve cells into biological types is necessary for understanding neural circuit organization. Morphology is an intuitive criterion for neuronal classification and a proxy of connectivity, but morphological diversity and variability often preclude resolving the granularity of discrete cell groups from population continuum. Combining genetic labeling with high-resolution, large volume light microscopy, we established a platform of genetic single neuron anatomy that resolves, registers and quantifies complete neuron morphologies in the mouse brain. We discovered that cortical axo-axonic cells (AACs), a cardinal GABAergic interneuron type that controls pyramidal neuron (PyN) spiking at axon initial segment, consist of multiple subtypes distinguished by laminar position, dendritic and axonal arborization patterns. Whereas the laminar arrangements of AAC dendrites reflect differential recruitment by input streams, the laminar distribution and local geometry of AAC axons enable differential innervation of PyN ensembles. Therefore, interneuron types likely consist of fine-grained subtypes with distinct input-output connectivity patterns.

Rationalization and Incomplete Information

We analyze a family of extensive-form solution procedures for games with incomplete information that do not require the specification of an epistemic type space a la Harsanyi, but can accommodate a (commonly known) collection of explicit restrictions D on first-order beliefs. For any fixed D we obtain a solution called D-rationalizability.In static games, D-rationalizability characterizes the set of outcomes (combinations of payoff types and strategies) that may occur in any Bayesian equilibrium model consistent with D; these are precisely the outcomes consistent with common certainty of rationality and of the restrictions D. Hence, our approach to the analysis of incomplete-information games is consistent with Harsanyi's, and it may be viewed as capturing the robust implications of Bayesian equilibrium analysis.In dynamic games, D-rationalizability yields a forward-induction refinement of this set of Bayesian equilibrium outcomes. Focusing on the restriction that first-order beliefs be consistent with a given distribution on terminal nodes, we obtain a refinement of self-confirming equilibrium. In signalling games, this refinement coincides with the Iterated Intuitive Criterion.

AN EFFECTIVE ALGORITHM FOR COMPUTING EQUILIBRIUM OUTCOME OF A CLASS OF SIGNALING GAMES

In this paper, we study the class of signaling games in which a unique perfect Bayesian Nash equilibrium outcome satisfying the Intuitive Criterion exists. We first describe the models of signaling games and lay out the definition of equilibrium and some basic assumptions. We then prove three basic theorems leading to the proof of the main theorem that gives sufficient conditions under which a signaling game has a unique outcome. The proof of the main theorem also leads to a method for computing the equilibrium outcome. We formally present the algorithm and illustrate its application through a numerical example. Finally, we apply our algorithm to enterprise management decision-making.

Geodesic Formulation of the Least Motion Principle in Chemical Reactivity

In this study an attempt is presented at the quantitative formulation of the old intuitive criterion for the characterization of chemical reactivity known as the principle of the least motion. The proposed formulation originates from the abstract mathematical model, within the framework of which the criterion of minimal structural changes is realized by the requirement of minimal changes of the state vectors in the Hilbert space of electron states. The presented approach is demonstrated on the practical example of pericyclic reactions for which its results correctly reproduce the conclusions of Woodward-Hoffmann rules.