Abstract:
Technological change at the film-level has commonly been modeled as random sampling from a fixed distribution of possibilities. Such models, however, typically ignore empirically important aspects of the firm's search process, notably the observation that the present state of the firm guides future innovation. We explicitly treat this aspect of the firm's search for technological improvements by introducing a "technology landscape" (Fig. 6) into an otherwise standard dynamic programming setting where the optimal strategy is to assign a reservation price to each possible technology. Search is modeled as movement, constrained by the cost of innovation, over the technology landscape. Simulations (Fig. 6) are presented on a stylized technology landscape while analytic results are derived using landscapes that are similar to Markov random fields.
Abstract:
The present invention presents a system and method of economic analysis and prediction which dynamically adapts to a changing economic environment by selecting or synthesizing an economic model from a set of economic models based on the selected model's ability to make accurate predictions about an actual economic market. Specifically, the method and system of the present invention forms a space of different economic models (105), forms a behavorial landscape by extracting observables from executions of the economic models (120), and performs model selection and composite model synthesis through optimization (130) over the behavioral landscape.
Abstract:
The present invention presents a comprehensive system and method for operations management which has the reliability and adaptability to handle failures and changes respectively within the economic environment. The present invention presents a framework of features which include technology graphs (110), landscape representations (112) and automated markets to achieve the requisite reliability and adaptability.
Abstract:
A system and method are provided which dynamically adapts to a changing economic environment by selecting or synthesizing an economic model from a set of economic models based on the selected model's ability to make accurate predictions about an actual economic market. The method and system each forms a space of different economic models, forms a behavioral landscape by extracting observables from executions of the economic models, and performs model selection and composite model synthesis through optimization over the behavioral landscape.
Abstract:
Technological change at the firm-level has commonly been modeled as random sampling from a fixed distribution of possibilities. Such models, however, typically ignore empirically important aspects of the firm's search process, notably the observation that the present state of the firm guides future innovation. In this paper we explicitly treat this aspect of the firm's search for technological improvements by introducing a "technology landscape" into an otherwise standard dynamic programming setting where the optimal strategy is to assign a reservation price to each possible technology. Search is modeled as movement, constrained by the cost of innovation, over the technology landscape. Simulations are presented on a stylized technology landscape while analytic results are derived using landscapes that are similar to Markov random fields. We find that early in the search for technological improvements, if the initial position is poor or average, it is optimal to search far away on the technology landscape; but as the firm succeeds in finding technological improvements it is optimal to confine search to a local region of the landscape. We obtain the result that there are diminishing returns to search without having to make the assumption that the firm's repeated draws from the search space are independent and identically distributed.
Abstract:
The present invention presents a comprehensive system and method for operations management which has the reliability and adaptability to handle failures and changes respectively within the economic environment. The prese nt invention presents a framework of features which include technology graphs (110), landscape representations (112) and automated markets to achieve the requisite reliability and adaptability.