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It has been assumed that arbitrage profits are not possible in efficient markets, because future prices are not predictable. Here we show that predictability alone is not a sufficient measure of market efficiency. We instead propose to…

Statistical Mechanics · Physics 2009-11-10 R. Rothenstein , K. Pawelzik

Eliciting information to reduce uncertainty about a latent entity is a critical task in many application domains, e.g., assessing individual student learning outcomes, diagnosing underlying diseases, or learning user preferences. Though…

Computation and Language · Computer Science 2025-07-10 Jimmy Wang , Thomas Zollo , Richard Zemel , Hongseok Namkoong

Even though the forecasting literature agrees that aggregating multiple predictions of some future outcome typically outperforms the individual predictions, there is no general consensus about the right way to do this. Most common…

Methodology · Statistics 2018-01-24 Ville A. Satopää

This paper considers the problem of forecasting a collection of short time series using cross sectional information in panel data. We construct point predictors using Tweedie's formula for the posterior mean of heterogeneous coefficients…

Econometrics · Economics 2017-10-02 Laura Liu , Hyungsik Roger Moon , Frank Schorfheide

We propose a new approach for solving a class of discrete decision making problems under uncertainty with positive cost. This issue concerns multiple and diverse fields such as engineering, economics, artificial intelligence, cognitive…

Artificial Intelligence · Computer Science 2014-01-03 Steve N'Guyen , Clément Moulin-Frier , Jacques Droulez

Classifiers are often tested on relatively small data sets, which should lead to uncertain performance metrics. Nevertheless, these metrics are usually taken at face value. We present an approach to quantify the uncertainty of…

Machine Learning · Statistics 2021-03-05 Niklas Tötsch , Daniel Hoffmann

The ability of a society to make the right decisions on relevant matters relies on its capability to properly aggregate the noisy information spread across the individuals it is made of. In this paper we study the information aggregation…

Physics and Society · Physics 2015-06-16 Giacomo Livan , Matteo Marsili

In this paper, we present a unified framework for decision making under uncertainty. Our framework is based on the composite of two risk measures, where the inner risk measure accounts for the risk of decision given the exact distribution…

Optimization and Control · Mathematics 2015-01-07 Pengyu Qian , Zizhuo Wang , Zaiwen Wen

Bayesian model comparison (BMC) offers a principled probabilistic approach to study and rank competing models. In standard BMC, we construct a discrete probability distribution over the set of possible models, conditional on the observed…

Machine Learning · Statistics 2023-02-22 Marvin Schmitt , Stefan T. Radev , Paul-Christian Bürkner

Linear model prediction with a large number of potential predictors is both statistically and computationally challenging. The traditional approaches are largely based on shrinkage selection/estimation methods, which are applicable even…

Methodology · Statistics 2024-09-17 Hanmei Sun , Jiangshan Zhang , Jiming Jiang

We outline how to create a mechanism that provides an optimal way to elicit, from an arbitrary group of experts, the probability of the truth of an arbitrary logical proposition together with collective information that has an explicit form…

Computer Science and Game Theory · Computer Science 2023-09-04 Alexey V. Osipov , Nikolay N. Osipov

We discuss how minimal financial market models can be constructed by bridging the gap between two existing, but incomplete, market models: a model in which a population of virtual traders make decisions based on common global information…

Trading and Market Microstructure · Quantitative Finance 2008-12-16 Andy Kirou , Blazej Ruszczycki , Markus Walser , Neil F. Johnson

Individuals are often influenced by the behavior of others, for instance because they wish to obtain the benefits of coordinated actions or infer otherwise inaccessible information. In such situations this social influence decreases the ex…

Adaptation and Self-Organizing Systems · Physics 2015-05-14 Richard Colbaugh , Kristin Glass , Paul Ormerod

In stochastic decision problems, one often wants to estimate the underlying probability measure statistically, and then to use this estimate as a basis for decisions. We shall consider how the uncertainty in this estimation can be…

Statistics Theory · Mathematics 2017-05-24 Samuel N. Cohen

In many areas of industry and society, e.g., energy, healthcare, logistics, agents collect vast amounts of data that they deem proprietary. These data owners extract predictive information of varying quality and relevance from data…

Theoretical Economics · Economics 2022-10-07 Aitazaz Ali Raja , Pierre Pinson , Jalal Kazempour , Sergio Grammatico

Combining measurements which have "theoretical uncertainties" is a delicate matter, due to an unclear statistical basis. We present an algorithm based on the notion that a theoretical uncertainty represents an estimate of bias.

Data Analysis, Statistics and Probability · Physics 2011-08-05 F. C. Porter

Reasoning about uncertainty is vital in many real-life autonomous systems. However, current state-of-the-art planning algorithms cannot either reason about uncertainty explicitly, or do so with a high computational burden. Here, we focus on…

Artificial Intelligence · Computer Science 2022-01-31 Moran Barenboim , Vadim Indelman

We pose uncertainty quantification and exploration in online decision-making as a problem of training and generation from an autoregressive sequence model, an area experiencing rapid innovation. Our approach rests on viewing uncertainty as…

Machine Learning · Computer Science 2025-02-06 Tiffany Tianhui Cai , Hongseok Namkoong , Daniel Russo , Kelly W Zhang

Many massive data are assembled through collections of information of a large number of individuals in a population. The analysis of such data, especially in the aspect of individualized inferences and solutions, has the potential to create…

Methodology · Statistics 2019-09-18 Chencheng Cai , Rong Chen , Min-ge Xie

Various measures can be used to estimate bias or unfairness in a predictor. Previous work has already established that some of these measures are incompatible with each other. Here we show that, when groups differ in prevalence of the…

Applications · Statistics 2017-09-13 Thomas Miconi