Related papers: Elasticity theory of structuring
A demandance is a psychological "pull" exerted by a stimulus. It is closely related to the theory of "affordance". I introduce the theory of demandance, offer some motivating examples, briefly explore its psychological basis, and examine…
We explore the effect of discounting and experimentation in a simple model of interacting adaptive agents. Agents belong to either of two types and each has to decide whether to participate a game or not, the game being profitable when…
Under the assumptions that (i) gamification consists of various types of users that experience game design elements differently; and (ii) gamification is deployed in order to achieve some goal in the broadest sense, we pose the gamification…
A new chaotic financial system is proposed by considering ethics involvement in a four-dimensional financial system with market confidence. A five-dimensional conformable derivative financial system is presented by introducing conformable…
The clarion call for causal reduction in the study of capital markets is intensifying. However, in self-referencing and open systems such as capital markets, the idea of unidirectional causation (if applicable) may be limiting at best, and…
Stablecoins promise to bridge fiat currencies with the world of cryptocurrencies. They provide a way for users to take advantage of the benefits of digital currencies, such as ability to transfer assets over the internet, provide assurance…
In a casino where arbitrarily small bets are admissible, any betting strategy M can be modified into a savings strategy that, not only is successful on each casino sequence where M is (thus accumulating unbounded wealth inside the casino)…
Stochastic portfolio theory aims at finding relative arbitrages, i.e. trading strategies which outperform the market with probability one. Functionally generated portfolios, which are deterministic functions of the market weights, are an…
We propose a control-theoretic interpretation of recommender systems and use this perspective to analyze how fairness interventions shape long-term system behavior. Fairness concerns arise for both users and creators, ranging from opinion…
The beautiful theory of statistical gambling, started by Dubins and Savage (for subfair games) and continued by Kelly and Breiman (for superfair games) has mostly been studied under the unrealistic assumption that we live in a continuous…
This work contains the mathematical exploration of a few prototypical games in which central concepts from statistics and probability theory naturally emerge. The first two kinds of games are termed Fisher and Bayesian games, which are…
Financial markets provide a natural quantitative lab for understanding some of the most advanced human behaviours. Among them is the use of mathematical tools known as financial instruments. Besides money, the two most fundamental financial…
The purpose of this article is to propose a new "theory," the Strategic Analysis of Financial Markets (SAFM) theory, that explains the operation of financial markets using the analytical perspective of an enlightened gambler. The gambler…
In this paper we provide a comprehensive analysis of a structural model for the dynamics of prices of assets traded in a market originally proposed in [1]. The model takes the form of an interacting generalization of the geometric Brownian…
A deterministic trading strategy can be regarded as a signal processing element that uses external information and past prices as inputs and incorporates them into future prices. This paper uses a market maker based method of price…
When predictions support decisions they may influence the outcome they aim to predict. We call such predictions performative; the prediction influences the target. Performativity is a well-studied phenomenon in policy-making that has so far…
Financial models do not merely analyse markets, but actively shape them. This effect, known as performativity, describes how financial theories and the subsequent actions based on them influence market processes, by creating self-fulfilling…
We propose a decision-analytical approach to comparing the flexibility of decision situations from the perspective of a decision-maker who exhibits constant risk-aversion over a monetary value model. Our approach is simple yet seems to be…
We introduce the notion of fault tolerant mechanism design, which extends the standard game theoretic framework of mechanism design to allow for uncertainty about execution. Specifically, we define the problem of task allocation in which…
We propose here to look at how abstract a model of a usable system can be, but still say something useful and interesting, so this paper is an exercise in abstraction and formalisation, with usability-of-design as an example target use. We…