Copyright © 2006 R ecently, an unusually high number of firms in the economy defaulted, with the default rate for Moody’s-rated speculativegrade issuers reaching as high as 10.2% in 2001. In their annual review, Moody’s summarized these credit events as follows, “Record defaults —unmatched in number and dollar volume since the Great Depression—have culminated in the bankruptcies of well-known f...

Using default logic, we formalize NETL-like inheritance hierarchies with exceptions. This provides a number of benefits: (1) A precise semantics for such hierarchies. (2) A provably correct (with respect to the proof theory of default logic) inference algorithm for acyclic networks. (3) A guarantee that acyclic networks have extensions. (4) A provably correct quasi-parallel inference algorithm ...

Default reasoning plays a fundamental role in a variety of information processing applications. Default inference is inherently computa-tionally hard and practical applications, specially time-bounded ones, may require that some notion of approximate inference be used. Anytime algorithms are a useful conceptualization of processes that may be prematurely terminated whenever necessary to return ...

An approach for introducing default reasoning into first-order Horn clause theories is described. A default theory is expressed as a set of strict implications of the form cy1 A . . . A a, > ,f?, and a set of default rules of the form cy1 A . . . A on =+ p, where the ai and ,6 are function-free literals. A partial order of sets of formulae is obtained from these sets of (strict and default) imp...

Studies have identified specific brain regions that increase activation during rest relative to attention-demanding tasks; these regions subserve the "default mode of brain function". Most of these studies have been conducted in the presence of scanner background noise (SBN). This noise has been shown to lead to altered attentional demands, and thus may modulate the default-mode network. Twelve...

According to previous research, changing the default contribution rate for a 401(k) pension plan has a powerful effect on the distribution of contributions among relatively new employees. We study the welfare effects of such changes and identify the default rates that maximizes total surplus. Because one can rationalize certain types of default effects in conventional models with switching cost...

Motivated by recent financial crises in East Asia and the U.S. where the downfall of a small number of firms had an economy-wide impact, this paper generalizes existing reduced-form models to include default intensities dependent on the default of a counterparty. In this model, firms have correlated defaults due not only to an exposure to common risk factors, but also to firm-specific risks tha...