Social and Behavioral Sciences Commons^™

So How To Make Group Decisions? Arrow's Impossibility Theorem 70 Years After, Hung T. Nguyen, Olga Kosheleva, Vladik Kreinovich

Departmental Technical Reports (CS)

In 1951, Kenneth Arrow proved that it is not possible to have a group decision making procedure that satisfies reasonable requirements like fairness. From the theoretical viewpoint, this is a great result -- well-deserving the Nobel Prize that was awarded to Professor Arrow. However, from the practical viewpoint, the question remains -- so how should we make group decisions? A usual way to solve this problem is to provide some reasonable heuristic ideas, but the problem is that different seemingly reasonable idea often lead to different group decision -- this is known, e.g., for different voting schemes. In this paper, …

Is It Fair That Advanced Workers Get Paid Disproportionally More: Economic Analysis, Olga Kosheleva, Sean R. Aguilar

Departmental Technical Reports (CS)

On the one hand, everyone agrees that economics should be fair, that workers should get equal pay for equal work. Any instance of unfairness causes a strong disagreement. On the other hand, in many companies, advanced workers -- who produce more than others -- get paid dispropotionally more for their work, and this does not seem to cause any negative feelings. In this paper, we analyze this situation from the economic viewpoint. We show that from this viewpoint, additional payments for advanced workers indeed make economic sense, benefit everyone, and thus -- in contrast to the naive literal interpretation of …

What Is Wrong With Micromanagement: Economic View, Sean R. Aguilar, Olga Kosheleva

Departmental Technical Reports (CS)

Purpose: It is well known that micromanagement -- excessive control of employees -- is detrimental to the employees' morale and thus, decreases their productivity. But what if the managers keep people happy -- will there still be negative consequences of micromanagement? This is the problem analyzed in this paper.

Design/methodology/approach: To analyze our problem, we use general -- but simplified -- mathematical models of how productivity depends on the working rate.

Findings: We show that even in the absence of psychological discomfort, micromanagement is still detrimental to productivity. Interestingly, the negative effect of micromanagement increases as the population becomes more …

Randomized Tax Deadlines Can Help Economy, Julio C. Urenda, Olga Kosheleva

Departmental Technical Reports (CS)

Purpose: While the main purpose of reporting -- e.g., reporting for taxes -- is to gauge the economic state of a company, the fact that reporting is done at pre-determined dates distorts the reporting results. For example, to create a larger impression of their productivity, companies fire temporary workers before the reporting date and re-hire then right away. The purpose of this study is to decide how to avoid such distortion.

Design/methodology/approach: We want to make our solution applicable for all possible reasonable optimality criteria. Thus, we use a general formalism for describing and analyzing all such criteria.

Findings: We …

When To Stop Computing And Start Investing, Sean R. Aguilar, Olga Kosheleva

Departmental Technical Reports (CS)

Purpose: The purpose of the study is to analyze when -- while predicting the future price of a financial instrument -- we should stop computations and start using this information for the actual investment.

Design/methodology/approach: We derive the explicit formulas explaining how the resulting gain depends on the duration of computations.

Findings: We provide an algorithm that enables us to decide the computation time that leads to the largest possible gain.

Originality/value: To the best of our knowledge, this is the first solution to the problem. Following our recommendations will allow investors to select the computation time for which the …

Need For Diversity In Elected Decision-Making Bodies: Economics-Related Analysis, Nguyen Ngoc Thach, Olga Kosheleva, Vladik Kreinovich

Departmental Technical Reports (CS)

On a qualitative level, everyone understands the need to have diversity in elected decision-making bodies, so that the viewpoint of each group be properly taken into account. However, when only the usual economic criteria are used in this election -- e.g., in the election of company's board -- the resulting bodies often under-represent some groups (e.g., women). A frequent way to remedy this situation is to artificially enforce diversity instead of strictly following purely economic criteria. In this paper, we show the current seeming contradiction between economics and diversity is caused by the imperfection of the use economic models: in …

Commonsense Explanations Of Sparsity, Zipf Law, And Nash's Bargaining Solution, Olga Kosheleva, Vladik Kreinovich, Kittawit Autchariyapanitkul

Departmental Technical Reports (CS)

As econometric models become more and more accurate and more and more mathematically complex, they also become less and less intuitively clear and convincing. To make these models more convincing, it is desirable to supplement the corresponding mathematics with commonsense explanations. In this paper, we provide such explanation for three economics-related concepts: sparsity (as in LASSO), Zipf's Law, and Nash's bargaining solution.

How To Explain The Anchoring Formula In Behavioral Economics, Laxman Bokati, Vladik Kreinovich, Chon Van Le

Departmental Technical Reports (CS)

According to the traditional economics, the price that a person is willing to pay for an item should be uniquely determined by the value that this person will get from this item, it should not depend, e.g., on the asking price proposed by the seller. In reality, the price that a person is willing to pay does depend on the asking price; this is known as the anchoring effect. In this paper, we provide a natural justification for the empirical formula that describes this effect.

Quantum (And More General) Models Of Research Collaboration, Oscar Galindo, Miroslav Svitek, Vladik Kreinovich

Departmental Technical Reports (CS)

In the last decades, several papers have shown that quantum techniques can be successful in describing not only events in the micro-scale physical world -- for which they were originally invented -- but also in describing social phenomena, e.g., different economic processes. In our previous paper, we provide an explanation for this somewhat surprising successes. In this paper, we extend this explanation and show that quantum (and more general) techniques can also be used to model research collaboration.

Preferences (Partial Pre-Orders) On Complex Numbers -- In View Of Possible Use In Quantum Econometrics, Songsak Sriboonchitta, Vladik Kreinovich, Olga Kosheleva

Departmental Technical Reports (CS)

In economic application, it is desirable to find an optimal solution -- i.e., a solution which is preferable to any other possible solution. Traditionally, the state of an economic system has been described by real-valued quantities such as profit, unemployment level, etc. For such quantities, preferences correspond to natural order between real numbers: all things being equal, the more profit the better, and the smaller unemployment, the better. Lately, it turned out that to adequately describe economic phenomena, it is often convenient to use complex numbers. From this viewpoint, a natural question is: what are possible orders on complex numbers? …

How To Best Apply Neural Networks In Geosciences: Towards Optimal "Averaging" In Dropout Training, Afshin Gholamy, Justin Parra, Vladik Kreinovich, Olac Fuentes, Elizabeth Y. Anthony

Departmental Technical Reports (CS)

The main objectives of geosciences is to find the current state of the Earth -- i.e., solve the corresponding inverse problems -- and to use this knowledge for predicting the future events, such as earthquakes and volcanic eruptions. In both inverse and prediction problems, often, machine learning techniques are very efficient, and at present, the most efficient machine learning technique is deep neural training. To speed up this training, the current learning algorithms use dropout techniques: they train several sub-networks on different portions of data, and then "average" the results. A natural idea is to use arithmetic mean for this …

How To Estimate Relative Spatial Resolution Of Different Maps Or Images Of The Same Area?, Christian Servin, A A. Velasco, Vladik Kreinovich

Departmental Technical Reports (CS)

In this paper, we describe how to estimate relative spatial resolution of different maps or images of the same area under uncertainty. We consider probabilistic and fuzzy approaches and we show that both approaches lead to the same estimates -- which makes us more confident that this joint result is reasonable.