Dieter Grass

Natural categorization through multiple feature learning in pigeons.

Recently (Troje, Huber, Loidolt, Aust, & Fieder 1999), we found that pigeons discriminated between large sets of photorealistic frontal images of human faces on the basis of sex. This ability was predominantly based on information contained in the visual texture of those images rather than in their configural properties. The pigeons could learn the distinction even when differences of shape and average intensity were completely removed. Here, we proved more specifically the pigeons’ flexibility and efficiency to utilize the class-distinguishing information contained in complex natural classes. First, we used principal component as well as discriminant function analysis in order to determine which aspects of the male and female images could support successful categorization. We then conducted various tests involving systematic transformations and reduction of the feature content to examine whether or not the pigeons’ categorization behaviour comes under the control of categorylevel feature dimensions—that is, those stimulus aspects that most accurately divide the stimulus classes into the experimenter-defined categories of “Male” and “Female”. Enhanced classification ability in the presence of impoverished test faces that varied only along one of the first three principal components provided evidence that the pigeons used these class-distinguishing stimulus aspects as a basis for generalization to new instances.

Optimal control of terrorism and global reputation: A case study with novel threshold behavior

A control model is presented which studies optimal spending for the fight against terrorism. Under the assumptions that economic damages are larger the greater the number of terrorists and that the success of counter terror operations depends on public opinion, it is demonstrated that a so-called DNSS threshold may exist, separating the basin of attraction of optimal paths.

Modeling the interaction between flooding events and economic growth

Recently socio-hydrology models have been proposed to analyze the interplay of community risk-coping culture, flooding damage and economic growth. These models descriptively explain the feedbacks between socio-economic development and natural disasters such as floods. Complementary to these descriptive models, we develop a dynamic optimization model, where the inter-temporal decision of an economic agent interacts with the hydrological system. We assume a standard macro-economic growth model where agents derive utility from consumption and output depends on physical capital that can be accumulated through investment. To this framework we add the occurrence of flooding events which will destroy part of the capital. We identify two specific periodic long term solutions and denote them rich and poor economies. Whereas rich economies can afford to invest in flood defense and therefore avoid flood damage and develop high living standards, poor economies prefer consumption instead of investing in flood defense capital and end up facing flood damages every time the water level rises like e.g. the Mekong delta. Nevertheless, they manage to sustain at least a low level of physical capital. We identify optimal investment strategies and compare simulations with more frequent, more intense and stochastic high water level events.

Controlling pollution and environmental absorption capacity

This pollution accumulation model shows that the environmental absorption capacity is impacted by economic activity. The resulting optimal control problem has two inter-related state variables: the stock of pollution and the absorption capacity of the environment. The stock of pollution decreases with environmental absorption capacity and increases with the rate of current emissions, which is controlled by a production level as well as an emissions reduction effort. However, the environmental absorption capacity is positively affected by an absorption development effort, and negatively impacted by the stock of pollution. Under specific conditions, it is shown that an optimal path, which can be either monotonic or following transient oscillations, leads to a (nontrivial) saddle-point characterized by a positive environmental absorption capacity.

Keeping Options Open: an Optimal Control Model with Trajectories That Reach a DNSS Point in Positive Time

The so-called DNSS points of indifference are of interest because they give decision makers in optimal control problems a choice between following either of two or more trajectories while still achieving optimality. Usually they are described in terms of initial conditions, so that if the system starts at a DNSS point, the decision maker can proceed in either of two or more directions. Here we present a model that has an entire curve of indifference points away from which the decision maker can move in only one direction but does so by choosing either of two trajectories that initially coincide in the state space but later diverge, approaching different long-run steady states.

MACROECONOMIC ASPECTS OF SUBSTANCE ABUSE: DIFFUSION, PRODUCTIVITY AND OPTIMAL CONTROL

This paper deals dynamically with macroeconomic aspects of widespread substance abuse with a reference to illicit drugs as an example. Substance-abuse impedes the productivity of the labour force and subsequently economic growth. The labour force is divided into non-using and therefore fully productive workers, a number of whom are employed by the government in drug-control activities, and drug users who are only partially productive. An efficient management of the nations portfolio of workers is taken to be the trajectory of drug-control that maximises the present value of the stream of disposable national incomes.

Leading bureaucracies to the tipping point: An alternative model of multiple stable equilibrium levels of corruption

Highlights ► We model an alternative explanation for tipping points in societal-level corruption. ► The bureaucracy’s culture of corruption is influenced by an executive’s actions. ► The nonlinear dynamical formulation is solved with Pontryagin’s Principle. ► The solution exhibits state-dependence and so-called Skiba points. ► Policy interpretations are somewhat more optimistic than in Schelling’s (1978) classic model.

Capital accumulation and embodied technological progress

This paper combines technology adoption with capital accumulation taking into account technological progress. We model this as a multi-stage optimal control problem and solve it using the corresponding maximum principle. The model with linear revenue can be solved analytically, while the model with market power is solved numerically. We obtain that investment jumps upwards right at the moment that a new technology is adopted. We find that, if the firm has market power, the firm cuts down on investment before a new technology is adopted. Furthermore, we find that larger firms adopt a new technology later.

Modelling the interaction between flooding events and economic growth

Abstract. Socio-hydrology describes the interaction between the socio-economy and water. Recent models analyze the interplay of community risk-coping culture, flooding damage and economic growth (Di Baldassarre et al., 2013; Viglione et al., 2014). These models descriptively explain the feedbacks between socio-economic development and natural disasters like floods. Contrary to these descriptive models, our approach develops an optimization model, where the intertemporal decision of an economic agent interacts with the hydrological system. In order to build this first economic growth model describing the interaction between the consumption and investment decisions of an economic agent and the occurrence of flooding events, we transform an existing descriptive stochastic model into an optimal deterministic model. The intermediate step is to formulate and simulate a descriptive deterministic model. We develop a periodic water function to approximate the former discrete stochastic time series of rainfall events. Due to the non-autonomous exogenous periodic rainfall function the long-term path of consumption and investment will be periodic.

Autonomous and advertising-dependent ‘word of mouth’ under costly dynamic pricing

Autonomous ‘word of mouth’, as a channel of social influence that is out of firms’ direct control, has acquired particular importance with the development of the Internet. Depending on whether a given product or service is a good or a bad deal, this can significantly contribute to commercial success or failure. Yet the existing dynamic models of sales in marketing still assume that the influence of word of mouth on sales is at best advertising-dependent. This omission can produce ineffective management and therefore misleading marketing policies. This paper seeks to bridge the gap by introducing a contagion sales model of a monopolist firms product where sales are affected by advertising-dependent as well as autonomous word of mouth. We assume that the firms attraction rate of new customers is determined by the degree at which the current sales price is advantageous or not compared with the current customers’ reservation price. A primary goal of the paper is to determine the optimal sales price and advertising effort. We show that, despite costly price adjustments, the interactions between sales price, advertising-dependent and autonomous word of mouth can result in complex dynamic pricing policies involving history-dependence or limit cycling consisting of alternating attraction of new customers and attrition of current customers.