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A new notion of stochastic ordering is introduced to compare multivariate stochastic risk models with respect to extreme portfolio losses. In the framework of multivariate regular variation comparison criteria are derived in terms of…

Risk Management · Quantitative Finance 2010-10-26 Georg Mainik , Ludger Rüschendorf

In the persuasion model, apart from a few special cases, comparative statics has been an open question. We answer it, delineating which shifts of the sender's interim payoff lead her optimally to choose a more informative signal. Our first…

Theoretical Economics · Economics 2025-11-26 Gregorio Curello , Ludvig Sinander

Consider two batches of independent or interdependent exponentiated location-scale distributed heterogeneous random variables. This article investigates ordering results for the second-order statistics from these batches when a vector of…

Statistics Theory · Mathematics 2021-04-20 Sangita Das , Suchandan Kayal

In this paper, we give an alternative proof of the fact that, when compounding a nonnegative probability distribution, convex ordering between the distributions of the number of summands implies convex ordering between the resulting…

Probability · Mathematics 2019-10-17 Jean Bérard , Nicolas Juillet

We introduce a new stochastic multi-armed bandit setting where arms are grouped inside ``ordered'' categories. The motivating example comes from e-commerce, where a customer typically has a greater appetence for items of a specific…

Machine Learning · Computer Science 2020-05-05 Matthieu Jedor , Jonathan Louedec , Vianney Perchet

In this paper, we establish a sufficient condition to compare linear combinations of independent and identically distributed (iid) infinite-mean random variables under usual stochastic order. We introduce a new class of distributions that…

Probability · Mathematics 2025-05-06 Yuyu Chen , Taizhong Hu , Seva Shneer , Zhenfeng Zou

We introduce a new approach for prudent risk evaluation based on stochastic dominance, which will be called the model aggregation (MA) approach. In contrast to the classic worst-case risk (WR) approach, the MA approach produces not only a…

Risk Management · Quantitative Finance 2024-06-11 Tiantian Mao , Ruodu Wang , Qinyu Wu

We study online convex optimization in the random order model, recently proposed by \citet{garber2020online}, where the loss functions may be chosen by an adversary, but are then presented to the online algorithm in a uniformly random…

Machine Learning · Computer Science 2021-06-30 Uri Sherman , Tomer Koren , Yishay Mansour

Spaces with locally varying scale of measurement, like multidimensional structures with differently scaled dimensions, are pretty common in statistics and machine learning. Nevertheless, it is still understood as an open question how to…

Machine Learning · Statistics 2024-03-05 Christoph Jansen , Georg Schollmeyer , Hannah Blocher , Julian Rodemann , Thomas Augustin

The estimation of risk measures recently gained a lot of attention, partly because of the backtesting issues of expected shortfall related to elicitability. In this work we shed a new and fundamental light on optimal estimation procedures…

Risk Management · Quantitative Finance 2017-08-25 Marcin Pitera , Thorsten Schmidt

We consider minimization of a smooth nonconvex function with inexact oracle access to gradient and Hessian (without assuming access to the function value) to achieve approximate second-order optimality. A novel feature of our method is that…

Optimization and Control · Mathematics 2024-03-27 Shuyao Li , Stephen J. Wright

A first-order model for a stock market assigns to each stock a return parameter and a variance parameter that depend only on the rank of the stock. A second-order model assigns these parameters based on both the rank and the name of the…

Statistical Finance · Quantitative Finance 2013-02-18 Robert Fernholz , Tomoyuki Ichiba , Ioannis Karatzas

Comparisons of different treatments or production processes are the goals of a significant fraction of applied research. Unsurprisingly, two-sample problems play a main role in Statistics through natural questions such as `Is the the new…

Methodology · Statistics 2017-09-05 P. C. Álvarez-Esteban , E. del Barrio , J. A. Cuesta-Albertos , C. Matrán

Probabilistic risk aversion, defined through quasi-convexity in probabilistic mixtures, is a common useful property in decision analysis. We study a general class of non-monotone mappings, called the generalized rank-dependent functions,…

Theoretical Economics · Economics 2024-09-30 Ruodu Wang , Qinyu Wu

Recent studies of gradient descent with large step sizes have shown that there is often a regime with an initial increase in the largest eigenvalue of the loss Hessian (progressive sharpening), followed by a stabilization of the eigenvalue…

Machine Learning · Computer Science 2022-10-11 Atish Agarwala , Fabian Pedregosa , Jeffrey Pennington

We investigate to which extent the relevant features of (static) Systemic Risk Measures can be extended to a conditional setting. After providing a general dual representation result, we analyze in greater detail Conditional Shortfall…

Mathematical Finance · Quantitative Finance 2021-05-12 Alessandro Doldi , Marco Frittelli

Turbulent dynamical systems characterized by both a high-dimensional phase space and a large number of instabilities are ubiquitous among many complex systems in science and engineering. The existence of a strange attractor in the turbulent…

Fluid Dynamics · Physics 2018-02-23 Andrew J. Majda , Di Qi

Given two random variables taking values in a bounded interval, we study whether one dominates the other in higher-order stochastic dominance depends on the reference interval in the model setting. We obtain two results. First, the…

Probability · Mathematics 2025-03-07 Ruodu Wang , Qinyu Wu

We introduce a novel framework to account for sensitivity to rewards uncertainty in sequential decision-making problems. While risk-sensitive formulations for Markov decision processes studied so far focus on the distribution of the…

Machine Learning · Computer Science 2020-09-16 Nelson Vadori , Sumitra Ganesh , Prashant Reddy , Manuela Veloso

Ranking distributions according to a stochastic order has wide applications in diverse areas. Although stochastic dominance has received much attention, convex order, particularly in general dimensions, has yet to be investigated from a…

Methodology · Statistics 2025-01-15 Jakwang Kim , Young-Heon Kim , Yuanlong Ruan , Andrew Warren