Parrondo’s Paradox in Finance: Combine two Losing Investments into a Winner

Wikipedia defines Parrondo’s paradox in game theory as

A combination of losing strategies becomes a winning strategy.

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Pseudo-Randomness: Creating Fake Noise

In data science, we try to find, sometimes well-hidden, patterns (= signal) in often seemingly random data (= noise). Pseudo-Random Number Generators (PRNG) try to do the opposite: hiding a deterministic data generating process (= signal) by making it look like randomness (= noise). If you want to understand some basics behind the scenes of this fascinating topic, read on!
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Cupid’s Arrow: How to Boost your Chances at Speed Dating!

During our little break, Valentine’s Day was celebrated. Yet for many, it was a depressing day because they are single and are looking for love.

Speed dating is a popular format (in times of Covid-19 also in virtual form) to meet many different potential soul mates in a short period of time. If you want to learn which factors determine “getting to the next round”, read on!
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How to be Successful! The Role of Risk-taking: A Simulation Study

When you ask successful people for their advice on how to become successful you will often hear that you have to take risks, often huge risks.

In this post we will examine whether this is good advice with a simple multi-agent simulation, so read on!
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R Coding Challenge: How many Lockers are Open?

The German news magazine DER SPIEGEL has a regular puzzle section in its online version, called “Rätsel der Woche” (“Riddle of the Week”). Some of those puzzles are quite interesting but I am often too lazy to solve them analytically.

So I often kill two birds with one stone: having fun solving the puzzle with R and creating some new teaching material for my R classes! This is what we will do with one of those more interesting riddles, which is quite hard to solve analytically but relatively easy to solve with R, so read on!
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ELIZA Chatbot in R: Build Yourself a Shrink

More and more companies use chatbots for engaging with their customers. Often the underlying technology is not too sophisticated, yet many people are stunned at how human-like those bots can appear. The earliest example of this was an early natural language processing (NLP) computer program called Eliza created 1966 at the MIT Artificial Intelligence Laboratory by Professor Joseph Weizenbaum.

Eliza was supposed to simulate a psychotherapist and was mainly created as a method to show the superficiality of communication between man and machine. Weizenbaum was surprised by the number of individuals who attributed human-like feelings to the computer program, including his own secretary!

If you want to build a simple Eliza-like chatbot yourself with R read on!
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Create Return Triangle Plots with R

How lucrative stocks are in the long run is not only dependent on the length of the investment period but even more on the actual date the investment starts and ends!

Return Triangle Plots are a great way to visualize this phenomenon. If you want to learn more about them and how to create them with R read on!
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Why Gradient Descent Works (and How To Animate 3D-Functions in R)

The workhorse of Machine Learning is Gradient Descent. If you want to understand how and why it works and, along the way, want to learn how to plot and animate 3D-functions in R read on!
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COVID-19 vaccine “95% effective”: It doesn’t mean what you think it means!

COVID-19 has the world more than ever in its grip – but there is hope: several vaccines have been developed which promise to deliver “95% efficacy”.

When people read this many assume that it means that 95% of vaccinated persons will be protected from infection – but that is not true. Even many (science) journalists get it wrong! If you want to understand what it really means, read on!
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