Statistical Inferences for Polarity Identification in Natural Language

Information forms the basis for all human behavior, including the ubiquitous decision-making that people constantly perform in their every day lives. It is thus the mission of researchers to understand how humans process information to reach decisions. In order to facilitate this task, this work proposes a novel method of studying the reception of granular expressions in natural language. The approach utilizes LASSO regularization as a statistical tool to extract decisive words from textual content and draw statistical inferences based on the correspondence between the occurrences of words and an exogenous response variable. Accordingly, the method immediately suggests significant implications for social sciences and Information Systems research: everyone can now identify text segments and word choices that are statistically relevant to authors or readers and, based on this knowledge, test hypotheses from behavioral research. We demonstrate the contribution of our method by examining how authors communicate subjective information through narrative materials. This allows us to answer the question of which words to choose when communicating negative information. On the other hand, we show that investors trade not only upon facts in financial disclosures but are distracted by filler words and non-informative language. Practitioners - for example those in the fields of investor communications or marketing - can exploit our insights to enhance their writings based on the true perception of word choice

On Cognitive Preferences and the Plausibility of Rule-based Models

It is conventional wisdom in machine learning and data mining that logical models such as rule sets are more interpretable than other models, and that among such rule-based models, simpler models are more interpretable than more complex ones. In this position paper, we question this latter assumption by focusing on one particular aspect of interpretability, namely the plausibility of models. Roughly speaking, we equate the plausibility of a model with the likeliness that a user accepts it as an explanation for a prediction. In particular, we argue that, all other things being equal, longer explanations may be more convincing than shorter ones, and that the predominant bias for shorter models, which is typically necessary for learning powerful discriminative models, may not be suitable when it comes to user acceptance of the learned models. To that end, we first recapitulate evidence for and against this postulate, and then report the results of an evaluation in a crowd-sourcing study based on about 3.000 judgments. The results do not reveal a strong preference for simple rules, whereas we can observe a weak preference for longer rules in some domains. We then relate these results to well-known cognitive biases such as the conjunction fallacy, the representative heuristic, or the recogition heuristic, and investigate their relation to rule length and plausibility.Comment: V4: Another rewrite of section on interpretability to clarify focus on plausibility and relation to interpretability, comprehensibility, and justifiabilit