The
key is that we are dealing with uncertainty rather than with risk: even
with an abundance of financial data, the dynamics of financial markets
are such that only a small proportion of the available data may actually
be relevant to the current economic conditions. And, when relevant data
are sparse, the variance term tends to dominate the bias term and thus
increase the overall prediction error of complex models.
HANSJÖRG NETH and GERD GIGERENZER
HANSJÖRG NETH and GERD GIGERENZER
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