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Model-based reasoning in financial domains

Published online by Cambridge University Press:  07 July 2009

Walter Hamscher
Walter Hamscher
Affiliation:
Price Waterhouse Technology Centre, 68 Willow Road, Menlo Park, CA 94025, USA.
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Abstract

Finance is a challenging yet appropriate domain for model-based reasoning, an area of research otherwise grounded in classical physics. Among the many features that suggest a model-based approach are that firms have formal internal structures, business entities have idealizable behaviours, and there is a history of formal analysis of business problems. This article discusses the motivations and foundations of the model-based approach, and surveys several existing artificial intelligence programs that exploit its advantages. The survey shows that there are ample opportunities for useful systems and significant research in this area. However, accomplishing either of these goals depends crucially upon moving beyond qualitative models based only on accounting information, which tend not to capture the actual complexities of the domain.

Type
Research Article
Information
The Knowledge Engineering Review , Volume 7 , Issue 4 , December 1992 , pp. 323 - 343
Copyright
Copyright © Cambridge University Press 1992

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