Causality, Correlation And Artificial Intelligence For Rational Decision Making

World Scientific
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Causality has been a subject of study for a long time. Often causality is confused with correlation. Human intuition has evolved such that it has learned to identify causality through correlation. In this book, four main themes are considered and these are causality, correlation, artificial intelligence and decision making. A correlation machine is defined and built using multi-layer perceptron network, principal component analysis, Gaussian Mixture models, genetic algorithms, expectation maximization technique, simulated annealing and particle swarm optimization. Furthermore, a causal machine is defined and built using multi-layer perceptron, radial basis function, Bayesian statistics and Hybrid Monte Carlo methods. Both these machines are used to build a Granger non-linear causality model. In addition, the Neyman-Rubin, Pearl and Granger causal models are studied and are unified. The automatic relevance determination is also applied to extend Granger causality framework to the non-linear domain. The concept of rational decision making is studied, and the theory of flexibly-bounded rationality is used to extend the theory of bounded rationality within the principle of the indivisibility of rationality. The theory of the marginalization of irrationality for decision making is also introduced to deal with satisficing within irrational conditions. The methods proposed are applied in biomedical engineering, condition monitoring and for modelling interstate conflict.
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Additional Information

Publisher
World Scientific
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Published on
Jan 2, 2015
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Pages
208
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ISBN
9789814630887
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Language
English
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Genres
Computers / Computer Vision & Pattern Recognition
Computers / Intelligence (AI) & Semantics
Computers / Neural Networks
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Content Protection
This content is DRM protected.
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Militarized Conflict Modeling Using Computational Intelligence examines the application of computational intelligence methods to model conflict. Traditionally, conflict has been modeled using game theory. The inherent limitation of game theory when dealing with more than three players in a game is the main motivation for the application of computational intelligence in modeling conflict.

Militarized interstate disputes (MIDs) are defined as a set of interactions between, or among, states that can result in the display, threat or actual use of military force in an explicit way. These interactions can result in either peace or conflict. This book models the relationship between key variables and the risk of conflict between two countries. The variables include Allies which measures the presence or absence of military alliance, Contiguity which measures whether the countries share a common boundary or not and Major Power which measures whether either or both states are a major power.

Militarized Conflict Modeling Using Computational Intelligence implements various multi-layer perception neural networks, Bayesian networks, support vector machines, neuro-fuzzy models, rough sets models, neuro-rough sets models and optimized rough sets models to create models that estimate the risk of conflict given the variables. Secondly, these models are used to study the sensitivity of each variable to conflict. Furthermore, a framework on how these models can be used to control the possibility of peace is proposed. Finally, new and emerging topics on modelling conflict are identified and further work is proposed.

Economic Modeling Using Artificial Intelligence Methods examines the application of artificial intelligence methods to model economic data. Traditionally, economic modeling has been modeled in the linear domain where the principles of superposition are valid. The application of artificial intelligence for economic modeling allows for a flexible multi-order non-linear modeling. In addition, game theory has largely been applied in economic modeling. However, the inherent limitation of game theory when dealing with many player games encourages the use of multi-agent systems for modeling economic phenomena.

The artificial intelligence techniques used to model economic data include:

multi-layer perceptron neural networksradial basis functionssupport vector machinesrough setsgenetic algorithmparticle swarm optimizationsimulated annealingmulti-agent systemincremental learningfuzzy networks

Signal processing techniques are explored to analyze economic data, and these techniques are the time domain methods, time-frequency domain methods and fractals dimension approaches. Interesting economic problems such as causality versus correlation, simulating the stock market, modeling and controling inflation, option pricing, modeling economic growth as well as portfolio optimization are examined. The relationship between economic dependency and interstate conflict is explored, and knowledge on how economics is useful to foster peace – and vice versa – is investigated. Economic Modeling Using Artificial Intelligence Methods deals with the issue of causality in the non-linear domain and applies the automatic relevance determination, the evidence framework, Bayesian approach and Granger causality to understand causality and correlation.

Economic Modeling Using Artificial Intelligence Methods makes an important contribution to the area of econometrics, and is a valuable source of reference for graduate students, researchers and financial practitioners.

Develops insights into solving complex problems in engineering, biomedical sciences, social science and economics based on artificial intelligence. Some of the problems studied are in interstate conflict, credit scoring, breast cancer diagnosis, condition monitoring, wine testing, image processing and optical character recognition. The author discusses and applies the concept of flexibly-bounded rationality which prescribes that the bounds in Nobel Laureate Herbert Simon’s bounded rationality theory are flexible due to advanced signal processing techniques, Moore’s Law and artificial intelligence.

Artificial Intelligence Techniques for Rational Decision Making examines and defines the concepts of causal and correlation machines and applies the transmission theory of causality as a defining factor that distinguishes causality from correlation. It develops the theory of rational counterfactuals which are defined as counterfactuals that are intended to maximize the attainment of a particular goal within the context of a bounded rational decision making process. Furthermore, it studies four methods for dealing with irrelevant information in decision making:

Theory of the marginalization of irrelevant information Principal component analysis Independent component analysisAutomatic relevance determination method

In addition it studies the concept of group decision making and various ways of effecting group decision making within the context of artificial intelligence.

Rich in methods of artificial intelligence including rough sets, neural networks, support vector machines, genetic algorithms, particle swarm optimization, simulated annealing, incremental learning and fuzzy networks, this book will be welcomed by researchers and students working in these areas.

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