The multivariate lognormal model is a basic pricing model for derivatives with multiple underlying processes, for example, spread options. However, the market observation of implied correlation skew examplifies how inaccurate the constant correlation assumption in the multivariate lognormal model can be. In this paper, we study alternative modeling approaches that generate implied correlation s...

This paper is intended as a stimulus to wider discussion on the nature of cause–effect models, and their role in educational research.It is clearlynot intendedtobedefinitive. Nor is it based on new evidence. It considers in turn models based on no causation at all, models based on causation alongside other explanatory processes, models based solely on causation, and variations of the latter. Am...

Branching space-times (BST) theory, as developed elsewhere, permits a sound and rigorously definable notion of ‘originating cause’ or causa causans—a type of transition event—of an outcome event. Mackie has famously suggested that causes form a family of ‘inus’ conditions, where an inus condition is ‘an insufficient but non-redundant part of an unnecessary but sufficient condition’. In this ess...

Unitary random matrix ensembles Z n,N (detM) α exp(−N TrV (M)) dM defined on positive definite matrices M , where α > −1 and V is real analytic, have a hard edge at 0. The equilibrium measure associated with V typically vanishes like a square root at soft edges of the spectrum. For the case that the equilibrium measure vanishes like a square root at 0, we determine the scaling limits of the eig...

II. THE TROUBLE WITH AI ............................................................... 358 A. What Is AI? ............................................................................... 359 B. The Problematic Characteristics of AI .................................... 362 1. Autonomy, Foreseeability, and Causation ............................ 363 2. Control ........................................

This paper asks why Argentina slipped into a deep crisis with its currency board (CB) arrangement though this regime had received so much academic support as a stabilisation device. It is argued that a CB does not make devaluation risks disappear but translates them into an explosive, strongly pro-cyclical mixture of exchange rate, financial system and default risk which might trap a country in...

Two main contrasting approaches are used in the entrepreneurship literature to explain how new ventures strategize: causal/planned strategies and effectual/emergent strategies. In this study, we explore the use of these strategies within micro and small firms. Our results show that larger companies typically used more planned strategies while simultaneously relying on effectual mechanisms. We o...

Because causal relations are neither observable nor deducible, they must be induced from observable events. The 2 dominant approaches to the psychology of causal induction—the covariation approach and the causal power approach—are each crippled by fundamental problems. This article proposes an integration of these approaches thai overcomes these problems. The proposal is that reasoners innately...

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This paper shows how to construct a Markovian arrival process of second order from information on the marginal distribution and on its autocorrelation function. More precisely, closed-form explicit expressions for the MAP(2) rate matrices are given in terms of the first three marginal moments and one parameter that characterizes the behavior of the autocorrelation function. Besides the permissi...