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Matus Medo

Publications and source records attributed to Matus Medo.

51 records · Page 3Linked to original sources

The effect of discrete vs. continuous-valued ratings on reputation and ranking systems

When users rate objects, a sophisticated algorithm that takes into account ability or reputation may produce a fairer or more accurate aggregation of ratings than the straightforward arithmetic average. Recently a number of authors have proposed different co-determination algorithms where estimates of user and object reputation are refined iteratively together, permitting accurate measures of both to be derived directly from the rating data. However, simulations demonstrating these methods' efficacy assumed a continuum of rating values, consistent with typical physical modelling practice, whereas in most actual rating systems only a limited range of discrete values (such as a 5-star system) is employed. We perform a comparative test of several co-determination algorithms with different scales of discrete ratings and show that this seemingly minor modification in fact has a significant impact on algorithms' performance. Paradoxically, where rating resolution is low, increased noise in users' ratings may even improve the overall performance of the system.

cs.IR↗

Solving the apparent diversity-accuracy dilemma of recommender systems

Recommender systems use data on past user preferences to predict possible future likes and interests. A key challenge is that while the most useful individual recommendations are to be found among diverse niche objects, the most reliably accurate results are obtained by methods that recommend objects based on user or object similarity. In this paper we introduce a new algorithm specifically to address the challenge of diversity and show how it can be used to resolve this apparent dilemma when combined in an elegant hybrid with an accuracy-focused algorithm. By tuning the hybrid appropriately we are able to obtain, without relying on any semantic or context-specific information, simultaneous gains in both accuracy and diversity of recommendations.

cs.IR↗

Building reputation systems for better ranking

How to rank web pages, scientists and online resources has recently attracted increasing attention from both physicists and computer scientists. In this paper, we study the ranking problem of rating systems where users vote objects by discrete ratings. We propose an algorithm that can simultaneously evaluate the user reputation and object quality in an iterative refinement way. According to both the artificially generated data and the real data from MovieLens and Amazon, our algorithm can considerably enhance the ranking accuracy. This work highlights the significance of reputation systems in the Internet era and points out a way to evaluate and compare the performances of different reputation systems.

cs.IR↗

Adaptive model for recommendation of news

Most news recommender systems try to identify users' interests and news' attributes and use them to obtain recommendations. Here we propose an adaptive model which combines similarities in users' rating patterns with epidemic-like spreading of news on an evolving network. We study the model by computer agent-based simulations, measure its performance and discuss its robustness against bias and malicious behavior. Subject to the approval fraction of news recommended, the proposed model outperforms the widely adopted recommendation of news according to their absolute or relative popularity. This model provides a general social mechanism for recommender systems and may find its applications also in other types of recommendation.

cs.IR↗

The role of a matchmaker in buyer-vendor interactions

We consider a simple market where a vendor offers multiple variants of a certain product and preferences of both the vendor and potential buyers are heterogeneous and possibly even antagonistic. Optimization of the joint benefit of the vendor and the buyers turns the toy market into a combinatorial matching problem. We compare the optimal solutions found with and without a matchmaker, examine the resulting inequality between the market participants, and study the impact of correlations on the system.

q-fin.GN↗

Analysis of Kelly-optimal portfolios

We investigate the use of Kelly's strategy in the construction of an optimal portfolio of assets. For lognormally distributed asset returns, we derive approximate analytical results for the optimal investment fractions in various settings. We show that when mean returns and volatilities of the assets are small and there is no risk-free asset, the Kelly-optimal portfolio lies on Markowitz Efficient Frontier. Since in the investigated case the Kelly approach forbids short positions and borrowing, often only a small fraction of the available assets is included in the Kelly-optimal portfolio. This phenomenon, that we call condensation, is studied analytically in various model scenarios.

q-fin.PM↗

How to quantify the influence of correlations on investment diversification

When assets are correlated, benefits of investment diversification are reduced. To measure the influence of correlations on investment performance, a new quantity - the effective portfolio size - is proposed and investigated in both artificial and real situations. We show that in most cases, the effective portfolio size is much smaller than the actual number of assets in the portfolio and that it lowers even further during financial crises.

q-fin.PM↗

Breakdown of the mean-field approximation in a wealth distribution model

One of the key socioeconomic phenomena to explain is the distribution of wealth. Bouchaud and Mézard have proposed an interesting model of economy [Bouchaud and Mézard (2000)] based on trade and investments of agents. In the mean-field approximation, the model produces a stationary wealth distribution with a power-law tail. In this paper we examine characteristic time scales of the model and show that for any finite number of agents, the validity of the mean-field result is time-limited and the model in fact has no stationary wealth distribution. Further analysis suggests that for heterogeneous agents, the limitations are even stronger. We conclude with general implications of the presented results.

q-fin.ST↗

Diversification and limited information in the Kelly game

Financial markets, with their vast range of different investment opportunities, can be seen as a system of many different simultaneous games with diverse and often unknown levels of risk and reward. We introduce generalizations to the classic Kelly investment game [Kelly (1956)] that incorporates these features, and use them to investigate the influence of diversification and limited information on Kelly-optimal portfolios. In particular we present approximate formulas for optimizing diversified portfolios and exact results for optimal investment in unknown games where the only available information is past outcomes.

q-fin.PM↗

Heterogeneous network with distance dependent connectivity

We investigate a network model based on an infinite regular square lattice embedded in the Euclidean plane where the node connection probability is given by the geometrical distance of nodes. We show that the degree distribution in the basic model is sharply peaked around its mean value. Since the model was originally developed to mimic the social network of acquaintances, to broaden the degree distribution we propose its generalization. We show that when heterogeneity is introduced to the model, it is possible to obtain fat tails of the degree distribution. Meanwhile, the small-world phenomenon present in the basic model is not affected. To support our claims, both analytical and numerical results are obtained.

physics.soc-ph↗

Market Model with Heterogeneous Buyers

In market modeling, one often treats buyers as a homogeneous group. In this paper we consider buyers with heterogeneous preferences and products available in many variants. Such a framework allows us to successfully model various market phenomena. In particular, we investigate how is the vendor's behavior influenced by the amount of available information and by the presence of correlations in the system.

q-fin.TR↗

Recommendation model based on opinion diffusion

Information overload in the modern society calls for highly efficient recommendation algorithms. In this letter we present a novel diffusion based recommendation model, with users' ratings built into a transition matrix. To speed up computation we introduce a Green function method. The numerical tests on a benchmark database show that our prediction is superior to the standard recommendation methods.

physics.soc-ph↗

How to project a bipartite network?

The one-mode projecting is extensively used to compress the bipartite networks. Since the one-mode projection is always less informative than the bipartite representation, a proper weighting method is required to better retain the original information. In this article, inspired by the network-based resource-allocation dynamics, we raise a weighting method, which can be directly applied in extracting the hidden information of networks, with remarkably better performance than the widely used global ranking method as well as collaborative filtering. This work not only provides a creditable method in compressing bipartite networks, but also highlights a possible way for the better solution of a long-standing challenge in modern information science: How to do personal recommendation?

physics.soc-ph↗

Distance-dependent connectivity: Yet Another Approach to the Small World Phenomenon

We investigate a relationship network of humans located in a metric space where relationships are drawn according to a distance-dependent probability density. The obtained spatial graph allows us to calculate the average separation of people in a very simple manner. The acquired results agree with the well-known presence of the small-world phenomenon in human relationships. They indicate that this feature can be understood merely as a consequence of the probability composition. We also examine how this phenomenon evolves with the development of human society.

physics.soc-ph↗