It is my great pleasure to visit with Primerus and its associated law firms and deliver an address at its 2018 Annual PDI Convocation.
Today I am UConn Law speaking at a Conference entitled – Evaluating Litigation Risk in the 21st Century. Thanks to Alexandra Lahav and the UConn Insurance Law Center for hosting me today!
The next leg of our SCOTUS Crowdsourcing Tour takes us to Minneapolis – for talk at the University of Minnesota Law School. Looking forward to it!
Today Michael J Bommarito II and I were live in Ann Arbor at the University of Michigan Center for Political Studies to kickoff the tour for our #SCOTUS Crowd Prediction Paper — here is version 1.01 of the slide deck !
Excited to take the show on the road next week where we will be presenting our SCOTUS Crowdsourcing Paper at University of Michigan Center for Political Studies and at the University of Minnesota Law School.
Michael Bommarito – From the Law of the Sea to Legal Underwriting
ABSTRACT: Scholars have increasingly investigated “crowdsourcing” as an alternative to expert-based judgment or purely data-driven approaches to predicting the future. Under certain conditions, scholars have found that crowd-sourcing can outperform these other approaches. However, despite interest in the topic and a series of successful use cases, relatively few studies have applied empirical model thinking to evaluate the accuracy and robustness of crowdsourcing in real-world contexts. In this paper, we offer three novel contributions. First, we explore a dataset of over 600,000 predictions from over 7,000 participants in a multi-year tournament to predict the decisions of the Supreme Court of the United States. Second, we develop a comprehensive crowd construction framework that allows for the formal description and application of crowdsourcing to real-world data. Third, we apply this framework to our data to construct more than 275,000 crowd models. We find that in out-of-sample historical simulations, crowdsourcing robustly outperforms the commonly-accepted null model, yielding the highest-known performance for this context at 80.8% case level accuracy. To our knowledge, this dataset and analysis represent one of the largest explorations of recurring human prediction to date, and our results provide additional empirical support for the use of crowdsourcing as a prediction method. (via SSRN)
This is a very interesting paper!
Here is Version 2.01 of the Law on the Market Paper —
From the Abstract: What happens when the Supreme Court of the United States decides a case impacting one or more publicly-traded firms? While many have observed anecdotal evidence linking decisions or oral arguments to abnormal stock returns, few have rigorously or systematically investigated the behavior of equities around Supreme Court actions. In this research, we present the first comprehensive, longitudinal study on the topic, spanning over 15 years and hundreds of cases and firms. Using both intra- and interday data around decisions and oral arguments, we evaluate the frequency and magnitude of statistically-significant abnormal return events after Supreme Court action. On a per-term basis, we find 5.3 cases and 7.8 stocks that exhibit abnormal returns after decision. In total, across the cases we examined, we find 79 out of the 211 cases (37%) exhibit an average abnormal return of 4.4% over a two-session window with an average |t|-statistic of 2.9. Finally, we observe that abnormal returns following Supreme Court decisions materialize over the span of hours and days, not minutes, yielding strong implications for market efficiency in this context. While we cannot causally separate substantive legal impact from mere revision of beliefs, we do find strong evidence that there is indeed a “law on the market” effect as measured by the frequency of abnormal return events, and that these abnormal returns are not immediately incorporated into prices.
We started this blog (7 years ago) because we thought that there was insufficient attention to computational methods in law (NLP, ML, NetSci, etc.) Over the years this blog has evolved to become mostly a blog about the business of law (and business more generally) and the world is being impacted by automation, artificial intelligence and more broadly by information technology.
Social science generally (and law as a late follower of developments in social science) it is still obsessed with causal inference (i.e. diff in diff, regression discontinuity, etc.). This is perfectly reasonable as it pertains to questions of evaluating certain aspects of public policy, etc.
However, there are many other problems in the universe that can be evaluated using tools from computer science, machine learning, etc. (and for which the tools of causal inference are not particularly useful).
In terms of the set of econ papers using ML, my bet is that a significant fraction of those papers are actually from finance (where people are more interested in actually predicting stuff).
In my 2013 article in Emory Law Journal called Quantitative Legal Prediction – I outline this distinction between causal inference and prediction and identify just a small set of the potential uses of predictive analytics in law. In some ways, my paper is already somewhat dated as the set of use cases has only grown. That said, the core points outlined therein remains fully intact …