Fuzzy Logic and Its Uses in Finance: A Systematic Review Exploring Its Potential to Deal with Banking Crises

The major success of fuzzy logic in the field of remote control opened the door to its application in many other fields, including finance. However, there has not been an updated and comprehensive literature review on the uses of fuzzy logic in the financial field. For that reason, this study attempts to critically examine fuzzy logic as an effective, useful method to be applied to financial research and, particularly, to the management of banking crises. The data sources were Web of Science and Scopus, followed by an assessment of the records according to pre-established criteria and an arrangement of the information in two main axes: financial markets and corporate finance. A major finding of this analysis is that fuzzy logic has not yet been used to address banking crises or as an alternative to ensure the resolvability of banks while minimizing the impact on the real economy. Therefore, we consider this article relevant for supervisory and regulatory bodies, as well as for banks and academic researchers, since it opens the door to several new research axes on banking crisis analyses using artificial intelligence techniques

Soft computing techniques applied to finance

Soft computing is progressively gaining presence in the financial world. The number of real and potential applications is very large and, accordingly, so is the presence of applied research papers in the literature. The aim of this paper is both to present relevant application areas, and to serve as an introduction to the subject. This paper provides arguments that justify the growing interest in these techniques among the financial community and introduces domains of application such as stock and currency market prediction, trading, portfolio management, credit scoring or financial distress prediction areas.Publicad

A model for providing emotion awareness and feedback using fuzzy logic in online learning

Monitoring users’ emotive states and using that information for providing feedback and scaffolding is crucial. In the learning context, emotions can be used to increase students’ attention as well as to improve memory and reasoning. In this context, tutors should be prepared to create affective learning situations and encourage collaborative knowledge construction as well as identify those students’ feelings which hinder learning process. In this paper, we propose a novel approach to label affective behavior in educational discourse based on fuzzy logic, which enables a human or virtual tutor to capture students’ emotions, make students aware of their own emotions, assess these emotions and provide appropriate affective feedback. To that end, we propose a fuzzy classifier that provides a priori qualitative assessment and fuzzy qualifiers bound to the amounts such as few, regular and many assigned by an affective dictionary to every word. The advantage of the statistical approach is to reduce the classical pollution problem of training and analyzing the scenario using the same dataset. Our approach has been tested in a real online learning environment and proved to have a very positive influence on students’ learning performance.Peer ReviewedPostprint (author's final draft

Building an Artificial Stock Market Populated by Reinforcement-Learning Agents

In this paper we propose an artificial stock market model based on interaction of heterogeneous agents whose forward-looking behaviour is driven by the reinforcement learning algorithm combined with some evolutionary selection mechanism. We use the model for the analysis of market self-regulation abilities, market efficiency and determinants of emergent properties of the financial market. Distinctive and novel features of the model include strong emphasis on the economic content of individual decision making, application of the Q-learning algorithm for driving individual behaviour, and rich market setup.agent-based financial modelling, artificial stock market, complex dynamical system, emergent properties, market efficiency, agent heterogeneity, reinforcement learning

From supply chains to demand networks. Agents in retailing: the electrical bazaar

A paradigm shift is taking place in logistics. The focus is changing from operational effectiveness to adaptation. Supply Chains will develop into networks that will adapt to consumer demand in almost real time. Time to market, capacity of adaptation and enrichment of customer experience seem to be the key elements of this new paradigm. In this environment emerging technologies like RFID (Radio Frequency ID), Intelligent Products and the Internet, are triggering a reconsideration of methods, procedures and goals. We present a Multiagent System framework specialized in retail that addresses these changes with the use of rational agents and takes advantages of the new market opportunities. Like in an old bazaar, agents able to learn, cooperate, take advantage of gossip and distinguish between collaborators and competitors, have the ability to adapt, learn and react to a changing environment better than any other structure. Keywords: Supply Chains, Distributed Artificial Intelligence, Multiagent System.Postprint (published version