We analyze sources of error in prediction market forecasts in order to bound the difference between a security's price and the ground truth it estimates.

A key ingredient to the recent breakthroughs in language modeling has been the availability of large-scale datasets.

Recently, Large Language Models (LLMs) are gaining increased attention in the domain of Table Question Answering (TQA), particularly for extracting information from tables in documents. However, directly entering entire tables as long text into LLMs often leads to incorrect answers because most LLMs cannot inherently capture complex table structures. In this paper, we propose a cell extraction method for TQA without manual identification, even for complex table headers. Our approach estimates table headers by computing similarities between a given question and individual cells via a hybrid retrieval mechanism that integrates a language model and TF-IDF. We then select as the answer the cells at the intersection of the most relevant row and column. Furthermore, the language model is trained using contrastive learning on a small dataset of question-header pairs to enhance performance. We evaluated our approach in the TQA dataset from the U4 shared task at NTCIR-18. The experimental results show that our pipeline achieves an accuracy of 74.6\%, outperforming existing LLMs such as GPT-4o mini~(63.9\%). In the future, although we used traditional encoder models for retrieval in this study, we plan to incorporate more efficient text-search models to improve performance and narrow the gap with human evaluation results.

Prediction markets are economic mechanisms for aggregating information about future events through sequential interactions with traders. The pricing mechanisms in these markets are known to be related to optimization algorithms in machine learning and through these connections we have some understanding of how equilibrium market prices relate to the beliefs of the traders in a market. However, little is known about rates and guarantees for the convergence of these sequential mechanisms, and two recent papers cite this as an important open question. In this paper we show how some previously studied prediction market trading models can be understood as a natural generalization of randomized coordinate descent which we call randomized subspace descent (RSD). We establish convergence rates for RSD and leverage them to prove rates for the two prediction market models above, answering the open questions. Our results extend beyond standard centralized markets to arbitrary trade networks.

Financial analysis presents complex challenges that could leverage large language model (LLM) capabilities. However, the scarcity of challenging financial datasets, particularly for Japanese financial data, impedes academic innovation in financial analytics. As LLMs advance, this lack of accessible research resources increasingly hinders their development and evaluation in this specialized domain. To address this gap, we introduce EDINET-Bench, an open-source Japanese financial benchmark designed to evaluate the performance of LLMs on challenging financial tasks including accounting fraud detection, earnings forecasting, and industry prediction. EDINET-Bench is constructed by downloading annual reports from the past 10 years from Japan's Electronic Disclosure for Investors' NETwork (EDINET) and automatically assigning labels corresponding to each evaluation task. Our experiments reveal that even state-of-the-art LLMs struggle, performing only slightly better than logistic regression in binary classification for fraud detection and earnings forecasting. These results highlight significant challenges in applying LLMs to real-world financial applications and underscore the need for domain-specific adaptation. Our dataset, benchmark construction code, and evaluation code is publicly available to facilitate future research in finance with LLMs.

When agents trade in a Duality-based Cost Function prediction market, they collectively implement the learning algorithm Follow-The-Regularized-Leader. We ask whether other learning algorithms could be used to inspire the design of prediction markets. By decomposing and modifying the Duality-based Cost Function Market Maker's (DCFMM) pricing mechanism, we propose a new prediction market, called the Smooth Quadratic Prediction Market, the incentivizes agents to collectively implement general steepest gradient descent. Relative to the DCFMM, the Smooth Quadratic Prediction Market has a better worst-case monetary loss for AD securities while preserving axiom guarantees such as the existence of instantaneous price, information incorporation, expressiveness, no arbitrage, and a form of incentive compatibility. To motivate the application of the Smooth Quadratic Prediction Market, we independently examine agents' trading behavior under two realistic constraints: bounded budgets and buy-only securities. Finally, we provide an introductory analysis of an approach to facilitate adaptive liquidity using the Smooth Quadratic Prediction Market. Our results suggest future designs where the price update rule is separate from the fee structure, yet guarantees are preserved.

Sumitomo and SBI Holdings will each acquire a 20% stake in a unit of Vietnam's software and telecommunications conglomerate FPT to foster artificial intelligence adoption in Japan, according to a statement. Sumitomo and SBI will invest in FPT Smart Cloud Japan, which oversees FPT's Japan AI data center, according to a statement from the Vietnamese technology firm. FPT will remain the unit's major stakeholder, it said. SBI Holdings late last year signed a memorandum of understanding to acquire as much as a 35% stake in FPT's Japan cloud unit. FPT is setting up a Japan AI data center, with an initial investment of 200 million.

We investigate the application of quantum cognition machine learning (QCML), a novel paradigm for both supervised and unsupervised learning tasks rooted in the mathematical formalism of quantum theory, to distance metric learning in corporate bond markets. Compared to equities, corporate bonds are relatively illiquid and both trade and quote data in these securities are relatively sparse. Thus, a measure of distance/similarity among corporate bonds is particularly useful for a variety of practical applications in the trading of illiquid bonds, including the identification of similar tradable alternatives, pricing securities with relatively few recent quotes or trades, and explaining the predictions and performance of ML models based on their training data. Previous research has explored supervised similarity learning based on classical tree-based models in this context; here, we explore the application of the QCML paradigm for supervised distance metric learning in the same context, showing that it outperforms classical tree-based models in high-yield (HY) markets, while giving comparable or better performance (depending on the evaluation metric) in investment grade (IG) markets.

As investor enthusiasm for artificial intelligence, and lately for a Trump Presidency, has been driving the stock market to record highs this year, Jeremy Grantham has been having flashbacks. At the end of the nineteen-nineties, the veteran value investor--one that looks for undervalued stocks--shied away from soaring Internet and technology stocks, believing that their prices had departed from financial reality, and that the market was heading for a crash. Far from thanking him for sounding the alarm, many clients of G.M.O., a Boston-based investment-management firm that Grantham had co-founded, held it responsible for making them miss out on a vertiginous rise in the Nasdaq, which went up by about a hundred and sixty per cent between 1998 and 1999. Some withdrew their money from the company. "We started off in a good position, and in two years we lost almost half of our business," Grantham recalled.