Applied Computational Intelligence for finance and economics

This article introduces some relevant research works on computational intelligence applied to finance and economics. The objective is to offer an appropriate context and a starting point for those who are new to computational intelligence in finance and economics and to give an overview of the most recent works. A classification with five different main areas is presented. Those areas are related with different applications of the most modern computational intelligence techniques showing a new perspective for approaching finance and economics problems. Each research area is described with several works and applications. Finally, a review of the research works selected for this special issue is given.Publicad

Design and development of an emulated human cognition using novel 3D neural networks

This paper describes the development of an Emulated Human Cognition (EHC) which is designed and based on a replicated human brain with a right- and a left- hand lobe, one a deductive side and the other a generic one. Right-hand lobe consists of a newly designed Artificial Neural Network (ANN) with a multi-hidden layer topology. Left-hand lobe is a newly designed 3-dimensional cellular neural network. The input variables presented to the EHC are immediately analysed for it to decide which lobe should be activated. The EHC, when fully developed, has almost an unlimited memory capacity and is capable of immediate recall of any data in its almost unlimited memory locations. EHC has been used in several applications where neural networks have been used to establish relationship between two or more sets of variables. In this paper the EHC has been used to forecast demand for a given product

Optimizing genetic algorithm strategies for evolving networks

This paper explores the use of genetic algorithms for the design of networks, where the demands on the network fluctuate in time. For varying network constraints, we find the best network using the standard genetic algorithm operators such as inversion, mutation and crossover. We also examine how the choice of genetic algorithm operators affects the quality of the best network found. Such networks typically contain redundancy in servers, where several servers perform the same task and pleiotropy, where servers perform multiple tasks. We explore this trade-off between pleiotropy versus redundancy on the cost versus reliability as a measure of the quality of the network.Comment: 9 pages, 5 figure

A Genetic Algorithm solver for pest management control in Island systems

Island conservation management is a truly multidisciplinary problem that requires considerable knowledge of the characteristics of the ecosystem, species and their interactions. Nevertheless, this can be translated into an optimisation problem. Essentially, within a limited budget, a manager needs to select the conservation actions according to expected payoffs (in terms of protecting or restoring desired species) versus cost (the amount of resources/money) required for the actions. This paper presents the problem in terms of a knapsack formulation and develops optimisation techniques to solve it. From this, decision-support software is being developed, tailored to meet the needs of pest control on islands for conservation managers. The solver uses a Genetic Algorithm and incorporates a simplified model of the problem. The solver derives strategies that reduce the number of threats, allowing the preservation of desired species. However, the problem model needs further refinement to derive truly realistic options for conservation managers

Exploring tradeoffs in pleiotropy and redundancy using evolutionary computing

Evolutionary computation algorithms are increasingly being used to solve optimization problems as they have many advantages over traditional optimization algorithms. In this paper we use evolutionary computation to study the trade-off between pleiotropy and redundancy in a client-server based network. Pleiotropy is a term used to describe components that perform multiple tasks, while redundancy refers to multiple components performing one same task. Pleiotropy reduces cost but lacks robustness, while redundancy increases network reliability but is more costly, as together, pleiotropy and redundancy build flexibility and robustness into systems. Therefore it is desirable to have a network that contains a balance between pleiotropy and redundancy. We explore how factors such as link failure probability, repair rates, and the size of the network influence the design choices that we explore using genetic algorithms.Comment: 10 pages, 6 figure

Using network calculus to optimize the AFDX network

This paper presents quantitative results we obtained when optimizing the setting of priorities of the AFDX traffic flows, with the objective to obtain tighter latency and queue-size deterministic bounds (those bounds are calculated by our Network Calculus tool). We first point out the fact that setting randomly the priorities gives worse bounds than using no priorities, and we then show experiments on the basis of classic optimization techniques such as a descent method and a tentative AlphaBetaassisted brute-force approach: both of them haven’t brought significantly better results. We finally present experiments based on genetic algorithms, and we show how driving these algorithms in an adequate way has allowed us to deliver a full range of priority configurations that bring tighter bounds and allow the network traffic designer to trade off average gains of 40% on all the latency bounds against focused improvement on the largest queue-size bound (up to a 30% reduction)

Using Genetic Algorithms on Groundwater Modeling Problems in a Consulting Setting

This paper presents a practical application for writing and applying simple genetic algorithms (GAs) for the common groundwater flow model, MODFLOW. The method employed by GAs is derived from the driving forces of evolution in the natural world. They employ functions that mimic natural evolutionary processes including selection, mutation, and genetic crossover. A GA solves mathematical problems where a desired outcome to the problem is defined (for example, calibration targets or remediation goals), but the inputs needed to arrive at this outcome are unknown. Our paper includes an introduction to genetic algorithms, the pseudocode of our genetic algorithm for MODFLOW, and the results of an experiential application. Due to the lack of commercially available GAs for MODFLOW, we coded a simple algorithm in Visual Basic Script and applied it to an example model. In the example model, the GA was used to conduct parameter estimation on a MODFLOW model of a river basin in New England that we had previously developed and calibrated in our practice. The calibration target used was net groundwater flow into the river. Four model input parameters were selected as chromosomes for the GA to act on: recharge, river conductance, and two general head boundaries. An initial population of 100 models was developed by varying the value of the gene parameters. The GA ran a MODFLOW simulation for each member of the population, extracted each output file, and established the error of each model from the calibration target. It then evolved the entire population of models towards the calibration target. The GA converged on a single set of input parameter that established best-fit values for all of the chromosome parameters. Genetic algorithms provide a practical alternative to trial-and-error and automated statistical calibration procedures, and can also be used for optimization