Business process compliance checking – applying and evaluating a generic pattern matching approach for conceptual models in the financial sector

Given the strong increase in regulatory requirements for business processes the management of business process compliance becomes a more and more regarded field in IS research. Several methods have been developed to support compliance checking of conceptual models. However, their focus on distinct modeling languages and mostly linear (i.e., predecessor-successor related) compliance rules may hinder widespread adoption and application in practice. Furthermore, hardly any of them has been evaluated in a real-world setting. We address this issue by applying a generic pattern matching approach for conceptual models to business process compliance checking in the financial sector. It consists of a model query language, a search algorithm and a corresponding modelling tool prototype. It is (1) applicable for all graph-based conceptual modeling languages and (2) for different kinds of compliance rules. Furthermore, based on an applicability check, we (3) evaluate the approach in a financial industry project setting against its relevance for decision support of audit and compliance management tasks.     

Simulating protection rackets: a case study of the Sicilian Mafia

Protection racketeering groups are powerful, deeply entrenched in multiple societies across the globe, and they harm the societies and economies in which they operate in multiple ways. These reasons make their dynamics important to understand and an objective of both scientific and application-oriented interest. Legal and social norm-based approaches arguably play significant roles in influencing protection racket dynamics. We propose an agent-based simulation model, the Palermo Scenario, to enrich our understanding of these influences and to test the effect of different policies on protection racket dynamics. Our model integrates the legal and the social norm-based approaches and uses a complex normative agent architecture that enables the analysis of both agents’ behaviours and mental normative representations driving behaviour. We demonstrate the usefulness of the model and the benefits of using this complex normative architecture through a case study of the Sicilian Mafia.     

A simulation framework for measuring robustness of incentive mechanisms and its implementation in reputation systems

In game theoretical analysis of incentive mechanisms, all players are assumed to be rational. Since it is likely that mechanism participants in the real world may not be fully rational, such mechanisms may not work as effectively as in the idealized settings for which they were designed. Therefore, it is important to evaluate the robustness of incentive mechanisms against various types of agents with bounded rational behaviors. Such evaluations would provide us with the information needed to choose mechanisms with desired properties in real environments. In this article, we first propose a general robustness measure, inspired by research in evolutionary game theory, as the maximal percentage of invaders taking non-equilibrium strategies such that the agents sustain the desired equilibrium strategy. We then propose a simulation framework based on evolutionary dynamics to empirically evaluate the equilibrium robustness. The proposed simulation framework is validated by comparing the simulated results with the analytical predictions based on a modified simplex analysis approach. Finally, we implement the proposed simulation framework for evaluating the robustness of incentive mechanisms in reputation systems for electronic marketplaces. The results from the implementation show that the evaluated mechanisms have high robustness against a certain non-equilibrium strategy, but is vulnerable to another strategy, indicating the need for designing more robust incentive mechanisms for reputation management in e-marketplaces.     

A coherence maximisation process for solving normative inconsistencies

Norms can be used in multi-agent systems for defining patterns of behaviour in terms of permissions, prohibitions and obligations that are addressed to agents playing a specific role. Agents may play different roles during their execution and they may even play different roles simultaneously. As a consequence, agents may be affected by inconsistent norms; e.g., an agent may be simultaneously obliged and forbidden to reach a given state of affairs. Dealing with this type of inconsistency is one of the main challenges of normative reasoning. Existing approaches tackle this problem by using a static and predefined order that determines which norm should prevail in the case where two norms are inconsistent. One main drawback of these proposals is that they allow only pairwise comparison of norms; it is not clear how agents may use the predefined order to select a subset of norms to abide by from a set of norms containing multiple inconsistencies. Furthermore, in dynamic and non-deterministic environments it can be difficult or even impossible to specify an order that resolves inconsistencies satisfactorily in all potential situations. In response to these two problems, we propose a mechanism with which an agent can dynamically compute a preference order over subsets of its competing norms by considering the coherence of its cognitive and normative elements. Our approach allows flexible resolution of normative inconsistencies, tailored to the current circumstances of the agent. Moreover, our solution can be used to determine norm prevalence among a set of norms containing multiple inconsistencies.     

Majority bargaining for resource division

We address the problem of how a set of agents can decide to share a resource, represented as a unit-sized pie. The pie can be generated by the entire set but also by some of its subsets. We investigate a finite horizon non-cooperative bargaining game, in which the players take it in turns to make proposals on how the resource should for this purpose be allocated, and the other players vote on whether or not to accept the allocation. Voting is modelled as a Bayesian weighted voting game with uncertainty about the players’ weights. The agenda, (i.e., the order in which the players are called to make offers), is defined exogenously. We focus on impatient players with heterogeneous discount factors. In the case of a conflict, (i.e., no agreement by the deadline), no player receives anything. We provide a Bayesian subgame perfect equilibrium for the bargaining game and conduct an ex-ante analysis of the resulting outcome. We show that the equilibrium is unique, computable in polynomial time, results in an instant Pareto optimal outcome, and, under certain conditions provides a foundation for the core and also the nucleolus of the Bayesian voting game. In addition, our analysis leads to insights on how an individual’s bargained share is influenced by his position on the agenda. Finally, we show that, if the conflict point of the bargaining game changes, then the problem of determining the non-cooperative equilibrium becomes NP-hard even under the perfect information assumption. Our research also reveals how this change in conflict point impacts on the above mentioned results.     

Multi-label classification via learning a unified object-label graph with sparse representation

Automatic annotation is an essential technique for effectively handling and organizing Web objects (e.g., Web pages), which have experienced an unprecedented growth over the last few years. Automatic annotation is usually formulated as a multi-label classification problem. Unfortunately, labeled data are often time-consuming and expensive to obtain. Web data also accommodate much richer feature space. This calls for new semi-supervised approaches that are less demanding on labeled data to be effective in classification. In this paper, we propose a graph-based semi-supervised learning approach that leverages random walks and ? ₁ sparse reconstruction on a mixed object-label graph with both attribute and structure information for effective multi-label classification. The mixed graph contains an object-affinity subgraph, a label-correlation subgraph, and object-label edges with adaptive weight assignments indicating the assignment relationships. The object-affinity subgraph is constructed using ? ₁ sparse graph reconstruction with extracted structural meta-text, while the label-correlation subgraph captures pairwise correlations among labels via linear combination of their co-occurrence similarity and kernel-based similarity. A random walk with adaptive weight assignment is then performed on the constructed mixed graph to infer probabilistic assignment relationships between labels and objects. Extensive experiments on real Yahoo! Web datasets demonstrate the effectiveness of our approach.     

Distributed envy minimization for resource allocation

Minimizing envy in distributed discrete resource or task allocation, is an unusual distributed optimization challenge, since the quality of the allocation for each of the agents is dependent, not only on its own allocation, but on the allocation of others as well. Thus, in order to perform distributed search for allocations with minimal envy there is a need to design innovative algorithms that can cope with the challenging constraint structure of an envy minimization problem. Distributed methods for minimizing envy among agents in indivisible resource allocation problems are presented. First, Distributed Envy Minimization Problems (DEMP) are formulated as Distributed Constraint Reasoning problems. When the DEMPs are large, and cannot be solved by a complete search an incomplete local search algorithm is presented. Each transfer of a good from one agent to another involves the change of state of more than one agent. Thus, a minimizing envy local search algorithm must build upon actions (transfers) that include multiple agents. Since DEMPs are particularly susceptible to local minima during local search, the paper proposes an algorithm that alternates between two different hill climbing search phases. The first phase uses one-transfer steps while the other exploits envy cycle elimination steps. An algorithm that minimizes envy while preserving efficiency, is proposed. The proposed algorithm finds a Pareto optimal allocation with low envy. In the context of resource allocation problems, a Pareto optimal solution is particularly desirable since it presents a stable solution. The proposed algorithm first finds a divisible Pareto optimal envy-free allocation using a Fisher market equilibrium. This allocation is transferred into an indivisible allocation of goods while maintaining the Pareto optimal characteristic of the allocation and a low envy level among agents.     

Distinguishing re-sharing behaviors from re-creating behaviors in information diffusion

Social media plays a fundamental role in the diffusion of information. There are two different ways of information diffusion in social media platforms such as Twitter and Weibo. Users can either re-share messages posted by their friends or re-create messages based on the information acquired from other non-local information sources such as the mass media. By analyzing around 60 million messages from a large micro-blog site, we find that about 69 % of the diffusion volume can be attributed to users’ re-sharing behaviors, and the remaining 31 % are caused by user re-creating behaviors. The information diffusions caused by the two kinds of behaviors have different characteristics and variation trends, but most existing models of information diffusion do not distinguish them. The recent availability of massive online social streams allows us to study the process of information diffusion in much finer detail. In this paper, we introduce a novel model to capture and simulate the process of information diffusion in the micro-blog platforms, which distinguishes users’ re-sharing behaviors from re-creating behaviors by introducing two different components. Thus, our model not only considers the effect of the underlying network structure, but also the influence of other non-local information sources. The empirical results show the superiority of our proposed model in the fitting and prediction tasks of information diffusion.     

Complex-query web image search with concept-based relevance estimation

Complex queries are widely used in current Web applications. They express highly specific information needs, but simply aggregating the meanings of primitive visual concepts does not perform well. To facilitate image search of complex queries, we propose a new image reranking scheme based on concept relevance estimation, which consists of Concept-Query and Concept-Image probabilistic models. Each model comprises visual, web and text relevance estimation. Our work performs weighted sum of the underlying relevance scores, a new ranking list is obtained. Considering the Web semantic context, we involve concepts by leveraging lexical and corpus-dependent knowledge, such as Wordnet and Wikipedia, with co-occurrence statistics of tags in our Flickr corpus. The experimental results showed that our scheme is significantly better than the other existing state-of-the-art approaches.