Related papers: Election predictions are arbitrage-free: response …
The fifty-eighth American presidential election in 2016 still arouse fierce controversyat present. A portion of politicians as well as medium and voters believe that theRussian government interfered with the election of 2016 by controlling…
We characterize absence of arbitrage with simple trading strategies in a discounted market with a constant bond and several risky assets. We show that if there is a simple arbitrage, then there is a 0-admissible one or an obvious one, that…
In this article, we show necessary and sufficient conditions for a function to transform a continuous Markov semimartingale to a semimartingale. As a result, the no-arbitrage principle guarantees the differentiability of asset prices with…
We develop a simple theoretic game a model to analyze the relationship between electoral sys tems and governments' choice in trade policies. We show that existence of international pressure or foreign lobby changes a government's final…
In the recent years, a number of parameter-free algorithms have been developed for online linear optimization over Hilbert spaces and for learning with expert advice. These algorithms achieve optimal regret bounds that depend on the unknown…
On a variety of complex decision-making tasks, from doctors prescribing treatment to judges setting bail, machine learning algorithms have been shown to outperform expert human judgments. One complication, however, is that it is often…
Inefficient markets allow investors to consistently outperform the market. To demonstrate that inefficiencies exist in sports betting markets, we created a betting algorithm that generates above market returns for the NFL, NBA, NCAAF,…
We propose a simple yet effective solution to tackle the often-competing goals of fairness and utility in classification tasks. While fairness ensures that the model's predictions are unbiased and do not discriminate against any particular…
Opportunities for stochastic arbitrage in an options market arise when it is possible to construct a portfolio of options which provides a positive option premium and which, when combined with a direct investment in the underlying asset,…
Many high-stakes AI deployments proceed only if every stakeholder deems the system acceptable relative to their own minimum standard. With randomization over a finite menu of options, this becomes a feasibility question: does there exist a…
We consider a trader who aims to liquidate a large position in the presence of an arbitrageur who hopes to profit from the trader's activity. The arbitrageur is uncertain about the trader's position and learns from observed price…
In many areas of decision-making, forecasting is an essential pillar. Consequently, many different forecasting methods have been proposed. From our experience, recently presented forecasting methods are computationally intensive, poorly…
Forecasting elections -- a challenging, high-stakes problem -- is the subject of much uncertainty, subjectivity, and media scrutiny. To shed light on this process, we develop a method for forecasting elections from the perspective of…
We show that with suitable restrictions on allowable trading strategies, one has no arbitrage in settings where the traditional theory would admit arbitrage possibilities. In particular, price processes that are not semimartingales are…
Aggregating risks from multiple sources can be complex and demanding, and decision makers usually adopt heuristics to simplify the evaluation process. This paper axiomatizes two closed related and yet different heuristics, narrow bracketing…
If we accept Savage's set of axioms, then all uncertainties must be treated like ordinary probability. Savage espoused subjective probability, allowing, for example, the probability of Donald Trump's re-election. But Savage's probability…
Elections for public offices in democratic nations are large-scale examples of collective decision-making. As a complex system with a multitude of interactions among agents, we can anticipate that universal macroscopic patterns could emerge…
We develop two alternate approaches to arbitrage-free, market-complete, option pricing. The first approach requires no riskless asset. We develop the general framework for this approach and illustrate it with two specific examples. The…
Social media platforms allow users to create polls to gather public opinion on diverse topics. However, we know little about what such polls are used for and how reliable they are, especially in significant contexts like elections. Focusing…
Can a probabilistic gambler get arbitrarily rich when all deterministic gamblers fail? We study this problem in the context of algorithmic randomness, introducing a new notion -- almost everywhere computable randomness. A binary sequence…