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 econ



Stories that (are) Move(d by) Markets: A Causal Exploration of Market Shocks and Semantic Shifts across Different Partisan Groups

arXiv.org Artificial Intelligence

Macroeconomic fluctuations and the narratives that shape them form a mutually reinforcing cycle: public discourse can spur behavioural changes leading to economic shifts, which then result in changes in the stories that propagate. We show that shifts in semantic embedding space can be causally linked to financial market shocks -- deviations from the expected market behaviour. Furthermore, we show how partisanship can influence the predictive power of text for market fluctuations and shape reactions to those same shocks. We also provide some evidence that text-based signals are particularly salient during unexpected events such as COVID-19, highlighting the value of language data as an exogenous variable in economic forecasting. Our findings underscore the bidirectional relationship between news outlets and market shocks, offering a novel empirical approach to studying their effect on each other.


Language-based game theory in the age of artificial intelligence

arXiv.org Artificial Intelligence

Understanding human behaviour in decision problems and strategic interactions has wide-ranging applications in economics, psychology, and artificial intelligence. Game theory offers a robust foundation for this understanding, based on the idea that individuals aim to maximize a utility function. However, the exact factors influencing strategy choices remain elusive. While traditional models try to explain human behaviour as a function of the outcomes of available actions, recent experimental research reveals that linguistic content significantly impacts decision-making, thus prompting a paradigm shift from outcome-based to language-based utility functions. This shift is more urgent than ever, given the advancement of generative AI, which has the potential to support humans in making critical decisions through language-based interactions. We propose sentiment analysis as a fundamental tool for this shift and take an initial step by analyzing 61 experimental instructions from the dictator game, an economic game capturing the balance between self-interest and the interest of others, which is at the core of many social interactions. Our meta-analysis shows that sentiment analysis can explain human behaviour beyond economic outcomes. We discuss future research directions. We hope this work sets the stage for a novel game theoretical approach that emphasizes the importance of language in human decisions.


Is there really a Citation Age Bias in NLP?

arXiv.org Artificial Intelligence

Citations are a key ingredient of scientific research to relate a paper to others published in the community. Recently, it has been noted that there is a citation age bias in the Natural Language Processing (NLP) community, one of the currently fastest growing AI subfields, in that the mean age of the bibliography of NLP papers has become ever younger in the last few years, leading to `citation amnesia' in which older knowledge is increasingly forgotten. In this work, we put such claims into perspective by analyzing the bibliography of $\sim$300k papers across 15 different scientific fields submitted to the popular preprint server Arxiv in the time period from 2013 to 2022. We find that all AI subfields (in particular: cs.AI, cs.CL, cs.CV, cs.LG) have similar trends of citation amnesia, in which the age of the bibliography has roughly halved in the last 10 years (from above 12 in 2013 to below 7 in 2022), on average. Rather than diagnosing this as a citation age bias in the NLP community, we believe this pattern is an artefact of the dynamics of these research fields, in which new knowledge is produced in ever shorter time intervals.


A Latent Dirichlet Allocation (LDA) Semantic Text Analytics Approach to Explore Topical Features in Charity Crowdfunding Campaigns

arXiv.org Artificial Intelligence

Crowdfunding in the realm of the Social Web has received substantial attention, with prior research examining various aspects of campaigns, including project objectives, durations, and influential project categories for successful fundraising. These factors are crucial for entrepreneurs seeking donor support. However, the terrain of charity crowdfunding within the Social Web remains relatively unexplored, lacking comprehension of the motivations driving donations that often lack concrete reciprocation. Distinct from conventional crowdfunding that offers tangible returns, charity crowdfunding relies on intangible rewards like tax advantages, recognition posts, or advisory roles. Such details are often embedded within campaign narratives, yet, the analysis of textual content in charity crowdfunding is limited. This study introduces an inventive text analytics framework, utilizing Latent Dirichlet Allocation (LDA) to extract latent themes from textual descriptions of charity campaigns. The study has explored four different themes, two each in campaign and incentive descriptions. Campaign description themes are focused on child and elderly health mainly the ones who are diagnosed with terminal diseases. Incentive description themes are based on tax benefits, certificates, and appreciation posts. These themes, combined with numerical parameters, predict campaign success. The study was successful in using Random Forest Classifier to predict success of the campaign using both thematic and numerical parameters. The study distinguishes thematic categories, particularly medical need-based charity and general causes, based on project and incentive descriptions. In conclusion, this research bridges the gap by showcasing topic modelling utility in uncharted charity crowdfunding domains.


Stock Movement and Volatility Prediction from Tweets, Macroeconomic Factors and Historical Prices

arXiv.org Artificial Intelligence

Predicting stock market is vital for investors and policymakers, acting as a barometer of the economic health. We leverage social media data, a potent source of public sentiment, in tandem with macroeconomic indicators as government-compiled statistics, to refine stock market predictions. However, prior research using tweet data for stock market prediction faces three challenges. First, the quality of tweets varies widely. While many are filled with noise and irrelevant details, only a few genuinely mirror the actual market scenario. Second, solely focusing on the historical data of a particular stock without considering its sector can lead to oversight. Stocks within the same industry often exhibit correlated price behaviors. Lastly, simply forecasting the direction of price movement without assessing its magnitude is of limited value, as the extent of the rise or fall truly determines profitability. In this paper, diverging from the conventional methods, we pioneer an ECON. The framework has following advantages: First, ECON has an adept tweets filter that efficiently extracts and decodes the vast array of tweet data. Second, ECON discerns multi-level relationships among stocks, sectors, and macroeconomic factors through a self-aware mechanism in semantic space. Third, ECON offers enhanced accuracy in predicting substantial stock price fluctuations by capitalizing on stock price movement. We showcase the state-of-the-art performance of our proposed model using a dataset, specifically curated by us, for predicting stock market movements and volatility.


Addressing Execution and Observation Error in Security Games

AAAI Conferences

Attacker-defender Stackelberg games have become a popular game-theoretic approach for security with deployments for LAX Police, the FAMS and the TSA. Unfortunately, most of the existing solution approaches do not model two key uncertainties of the real-world: there may be noise in the defender’s execution of the suggested mixed strategy and/or the observations made by an attacker can be noisy. In this paper, we analyze a framework to model these uncertainties, and demonstrate that previous strategies perform poorly in such uncertain settings. We also analyze RECON, a novel algorithm that computes strategies for the defender that are robust to such uncertainties, and explore heuristics that further improve RECON’s efficiency.


Risk-Averse Strategies for Security Games with Execution and Observational Uncertainty

AAAI Conferences

Attacker-defender Stackelberg games have become a popular game-theoretic approach for security with deployments for LAX Police, the FAMS and the TSA. Unfortunately, most of the existing solution approaches do not model two key uncertainties of the real-world: there may be noise in the defender's execution of the suggested mixed strategy and/or the observations made by an attacker can be noisy. In this paper, we provide a framework to model these uncertainties, and demonstrate that previous strategies perform poorly in such uncertain settings. We also provide RECON, a novel algorithm that computes strategies for the defender that are robust to such uncertainties, and provide heuristics that further improve RECON's efficiency.