Weekly Top 5 Papers – October 22, 2018

1. Deep Fakes: A Looming Challenge for Privacy, Democracy, and National Security by Robert Chesney (University of Texas School of Law) and Danielle Keats Citron (University of Maryland Francis King Carey School of Law)

Among the more remarkable capabilities emerging from recent advances in machine learning is the ability to create video or audio content credibly portraying a real person saying or doing something they never said or did. Of course, fraud of this general kind has been around for a very long time.  What’s new is the use of deep learning techniques (especially the ‘generative adversarial network’ approach pitting a learning algorithm for creation against a learning algorithm for detection in a rapid evolutionary cycle) to produce fake video and audio that both passes the eyes-and-ears test and that can be exceedingly-difficult to debunk through forensic means. This capacity is likely to disseminate rapidly, empowering a widening circle of individuals and organizations.  Some good will come from this, but also lots of harm (involving privacy, democracy, and security).  We survey those prospects and then provide a somewhat-depressing review of the prospects for ameliorating the harms through legal, technical, and market means. – Bobby Chesney

2Is Bitcoin Really Un-Tethered? by John M. Griffin (University of Texas at Austin – Department of Finance) and Amin Shams (University of Texas at Austin – Department of Finance)

I am excited about research that is practical and helps us understand the way our financial system work, and maybe make them better. I typically do research in forensic finance–on things that are potentially, illegal, illicit, or immoral in financial markets.

Although there have credible allegations and evidence that LIBOR, FX, swaps, gold, silver, ect., seem to have been gamed, there is surprisingly extremely little academic work in these fields, perhaps because academics like to work in areas where others are working. But, the gaming of financial markets through financial sophistry is financial thievery and quite harmful to the trust that our financial system depends on.

I think academics can help shed light on markets features that allow gaming and those that do not. A credible and robust non-result can also be interesting and I have published work showing no questionable activity as well. The downloads are interesting because a top academic told me that he didn’t find the topic academically interesting or worthwhile. The paper elicited very different views from other academics–some many were quite interested, but it depends on one’s views about academic research. I think financial research should have applications and not just be useful for ivory-tower lunch discussions.  I would like to encourage researchers to not just write papers to try to get tenure, but to pick areas they are passionate about, where one can hope to truly understand our world, and at least potentially, make a small difference. –  John M. Griffin

3. A Brief Introduction to the Basics of Game Theory by Matthew O. Jackson ( Stanford University – Department of Economics)

4. Manipulation in the VIX? by John Griffin (University of Texas at Austin – Department of Finance) and Amin Shams (University of Texas at Austin – Department of Finance )

I am excited about research that is practical and helps us understand the way our financial system work, and maybe make them better. I typically do research on things that are potentially, illegal, illicit, or immoral in financial markets; topics in forensic finance. Although there have credible allegations and evidence that LIBOR, FX, swaps, gold, silver, ect., seem to have been gamed, there is surprisingly extremely little academic work in these fields, perhaps because academics like to work in areas where others are working. But, the gaming of financial markets through financial sophistry is financial thievery and quite harmful to the trust that our financial system depends on. Amin Shams and I became interested in the settlement process in this market after further study, because it had features that make it have the potential to be gamed. Nevertheless, I was skeptical, but the more we researched the market and the more data we received, the more interesting it appeared.

I think academics can help shed light on markets features that allow gaming and those that do not. A credible and robust non-result can also be interesting and I have published work showing no questionable activity as well. The downloads are interesting because some academics told me that they didn’t find the paper very interesting, perhaps because it was too applied. I think financial research should have applications and not just be useful for ivory-tower lunch discussions. The liveliest and heated ivory-tower lunch discussions I recall were always on applied topics. I would like to encourage young researchers to not just write papers to try to get tenure, but to pick areas they are passionate about and where one can, at least potentially, make a small difference. -John M. Griffin

5. Pulling the Goalie: Hockey and Investment Implications by Clifford S. Asness (AQR Capital Management, LLC) and Aaron Brown (New York University (NYU) – Courant Institute of Mathematical Sciences)

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