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Empirical distributions have their in-sample maxima as natural censoring. We look at the "hidden tail", that is, the part of the distribution in excess of the maximum for a sample size of $n$. Using extreme value theory, we examine the…

Statistical Finance · Quantitative Finance 2020-04-14 Nassim Nicholas Taleb

Consider an investor trading dynamically to maximize expected utility from terminal wealth. Our aim is to study the dependence between her risk aversion and the distribution of the optimal terminal payoff. Economic intuition suggests that…

General Finance · Quantitative Finance 2011-09-15 Mathias Beiglboeck , Johannes Muhle-Karbe , Johannes Temme

Distributional reinforcement learning (RL) -- in which agents learn about all the possible long-term consequences of their actions, and not just the expected value -- is of great recent interest. One of the most important affordances of a…

Artificial Intelligence · Computer Science 2021-11-15 Chris Gagne , Peter Dayan

Experiments suggest that people fail to take into account interdependencies between their choices -- they do not broadly bracket. Researchers often instead assume that people narrowly bracket, but existing designs do not test it. We design…

Theoretical Economics · Economics 2024-03-12 Andrew Ellis , David J. Freeman

We examine random variables in the power law/regularly varying class with stochastic tail exponent, the exponent $\alpha$ having its own distribution. We show the effect of stochasticity of $\alpha$ on the expectation and higher moments of…

Statistical Finance · Quantitative Finance 2017-04-06 Nassim Nicholas Taleb

Possible distributions are discussed for intertrade durations and first-passage processes in financial markets. The view-point of renewal theory is assumed. In order to represent market data with relatively long durations, two types of…

Trading and Market Microstructure · Quantitative Finance 2015-05-13 Naoya Sazuka , Jun-ichi Inoue , Enrico Scalas

Recommender systems help people find relevant content in a personalized way. One main promise of such systems is that they are able to increase the visibility of items in the long tail, i.e., the lesser-known items in a catalogue. Existing…

Information Retrieval · Computer Science 2024-07-03 Anastasiia Klimashevskaia , Dietmar Jannach , Mehdi Elahi , Christoph Trattner

Understanding the properties of response time distributions is a long-standing problem in cognitive science. We provide a tutorial overview of several contemporary models that assume power law scaling is a plausible description of the…

Neurons and Cognition · Quantitative Biology 2015-10-15 Z. Liu , O. Pavlov Garcia , J. G. Holden , R. A. Serota

We show how to reduce the problem of computing VaR and CVaR with Student T return distributions to evaluation of analytical functions of the moments. This allows an analysis of the risk properties of systems to be carefully attributed…

Portfolio Management · Quantitative Finance 2011-03-01 William T. Shaw

Adaptive populations such as those in financial markets and distributed control can be modeled by the Minority Game. We consider how their dynamics depends on the agents' initial preferences of strategies, when the agents use linear or…

Statistical Finance · Quantitative Finance 2009-11-13 H. M. Yang , Y. S. Ting , K. Y. Michael Wong

We present upper and lower bounds for the tail distribution of the stationary waiting time $D$ in the stable $GI/GI/s$ FCFS queue. These bounds depend on the value of the traffic load $\rho$ which is the ratio of mean service and mean…

Probability · Mathematics 2013-03-20 Sergey Foss , Dmitry Korshunov

We empirically study the activity patterns of individual blog-posting and find significant memory effects. The memory coefficient first decays in a power law and then turns to an exponential form. Moreover, the inter-event time distribution…

Physics and Society · Physics 2010-11-03 Peng Wang , Tao Zhou , Xiao-Pu Han , Bing-Hong Wang

Algorithmic predictions are increasingly informing societal resource allocations by identifying individuals for targeting. Policymakers often build these systems with the assumption that by gathering more observations on individuals, they…

Machine Learning · Computer Science 2025-03-04 Ali Shirali , Ariel Procaccia , Rediet Abebe

Human activity patterns display a bursty dynamics, with interevent times following a heavy tailed distribution. This behavior has been recently shown to be rooted in the fact that humans assign their active tasks different priorities, a…

Physics and Society · Physics 2009-11-11 Alexei Vazquez

Understanding user's perception of service variability is essential to discern their overall perception of any type of (transport) service. We study the perception of waiting time variability for ride-hailing services. We carried out a…

The recent availability of electronic datasets containing large volumes of communication data has made it possible to study human behavior on a larger scale than ever before. From this, it has been discovered that across a diverse range of…

Physics and Society · Physics 2015-05-08 Gordon J Ross , Tim Jones

We consider an M/M/1 feedback queue in which service attempts may fail, requiring the customer to rejoin the queue. Arriving customers act strategically, deciding whether to join the queue based on a threshold strategy that depends on the…

Probability · Mathematics 2025-07-16 Peter Taylor , Jiesen Wang

The goal of developing a firmer theoretical understanding of inhomogenous temporal processes -- in particular, the waiting times in some collective dynamical system -- is attracting significant interest among physicists. Quantifying the…

Statistical Finance · Quantitative Finance 2015-06-12 Guannan Zhao , Mark McDonald , Dan Fenn , Stacy Williams , Neil F. Johnson

The distribution of returns in financial time series exhibits heavy tails. In empirical studies, it has been found that gaps between the orders in the order book lead to large price shifts and thereby to these heavy tails. We set up an…

Trading and Market Microstructure · Quantitative Finance 2012-12-04 Thilo A. Schmitt , Rudi Schäfer , Michael C. Münnix , Thomas Guhr

High capacity end-to-end approaches for human motion (behavior) prediction have the ability to represent subtle nuances in human behavior, but struggle with robustness to out of distribution inputs and tail events. Planning-based…

Artificial Intelligence · Computer Science 2021-07-14 Liting Sun , Xiaogang Jia , Anca D. Dragan