We develop a structural bond valuation model to simultaneously capture liquidity and credit risk. Our model implies that renegotiation in financial distress is influenced by the illiquidity of the market for distressed debt. As default becomes more likely, the components of bond yield spreads attributable to illiquidity increase. When we consider finite maturity debt, we find decreasing and convex term structures of liquidity spreads. Using bond price data spanning 15 years, we find evidence of a positive correlation between the illiquidity and default components of yield spreads as well as support for downward-sloping term structures of liquidity spreads. Copyright 2006 by The American Finance Association.

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This paper presents an innovative way of animating actors at a high level based on the concept of synthetic vision. The objective is simple: to create an animation involving a synthetic actor automatically moving in a corridor avoiding objects and other synthetic actors. To simulate this behaviour, each synthetic actors uses a synthetic vision as its perception of the world and so as the unique input to its behavioural model. This model is based on the concept of displacement local automata (DLA), which is similar to the concept of a script for natural language processing. A DLA is an algorithm that can deal with a specific environment. Two DLAs, called follow‐the‐corridor and avoid‐the‐obstacle, are described in detail.

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