Reinforcement learning refers to a group of methods from artificial intelligence where an agent performs learning through trial and error. It differs from supervised learning, since reinforcement learning requires no explicit labels; instead, the agent interacts continuously with its environment. That is, the agent starts in a specific state and then performs an action, based on which it transitions to a new state and, depending on the outcome, receives a reward. Different strategies (e.g. Q-learning) have been proposed to maximize the overall reward, resulting in a so-called policy, which defines the best possible action in each state. Mathematically, this process can be formalized by a Markov decision process and it has been implemented by packages in R; however, there is currently no package available for reinforcement learning. As a remedy, this paper demonstrates how to perform reinforcement learning in R and, for this purpose, introduces the ReinforcementLearning package. The package provides a remarkably flexible framework and is easily applied to a wide range of different problems. We demonstrate its use by drawing upon common examples from the literature (e.g. finding optimal game strategies).

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This paper provides a holistic study of how stock prices vary in their response to financial disclosures across different topics. Thereby, we specifically shed light into the extensive amount of filings for which no a priori categorization of their content exists. For this purpose, we utilize an approach from data mining - namely, latent Dirichlet allocation - as a means of topic modeling. This technique facilitates our task of automatically categorizing, ex ante, the content of more than 70,000 regulatory 8-K filings from U.S. companies. We then evaluate the subsequent stock market reaction. Our empirical evidence suggests a considerable discrepancy among various types of news stories in terms of their relevance and impact on financial markets. For instance, we find a statistically significant abnormal return in response to earnings results and credit rating, but also for disclosures regarding business strategy, the health sector, as well as mergers and acquisitions. Our results yield findings that benefit managers, investors and policy-makers by indicating how regulatory filings should be structured and the topics most likely to precede changes in stock valuations.

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Researchers and financial professionals require robust computerized tools that allow users to rapidly operationalize and assess the semantic textual content in financial news. However, existing methods commonly work at the document-level while deeper insights into the actual structure and the sentiment of individual sentences remain blurred. As a result, investors are required to apply the utmost attention and detailed, domain-specific knowledge in order to assess the information on a fine-grained basis. To facilitate this manual process, this paper proposes the use of distributed text representations and multi-instance learning to transfer information from the document-level to the sentence-level. Compared to alternative approaches, this method features superior predictive performance while preserving context and interpretability. Our analysis of a manually-labeled dataset yields a predictive accuracy of up to 69.90%, exceeding the performance of alternative approaches by at least 3.80 percentage points. Accordingly, this study not only benefits investors with regard to their financial decision-making, but also helps companies to communicate their messages as intended.

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This paper examines the effect of two-sided argumentation on the perceived helpfulness of online consumer reviews. In contrast to previous works, our analysis thereby sheds light on the reception of reviews from a language-based perspective. For this purpose, we propose an intriguing text analysis approach based on distributed text representations and multi-instance learning to operationalize the two-sidedness of argumentation in review texts. A subsequent empirical analysis using a large corpus of Amazon reviews suggests that two-sided argumentation in reviews significantly increases their helpfulness. We find this effect to be stronger for positive reviews than for negative reviews, whereas a higher degree of emotional language weakens the effect. Our findings have immediate implications for retailer platforms, which can utilize our results to optimize their customer feedback system and to present more useful product reviews.

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Information forms the basis for all human behavior, including the ubiquitous decision-making that people constantly perform in their every day lives. It is thus the mission of researchers to understand how humans process information to reach decisions. In order to facilitate this task, this work proposes a novel method of studying the reception of granular expressions in natural language. The approach utilizes LASSO regularization as a statistical tool to extract decisive words from textual content and draw statistical inferences based on the correspondence between the occurrences of words and an exogenous response variable. Accordingly, the method immediately suggests significant implications for social sciences and Information Systems research: everyone can now identify text segments and word choices that are statistically relevant to authors or readers and, based on this knowledge, test hypotheses from behavioral research. We demonstrate the contribution of our method by examining how authors communicate subjective information through narrative materials. This allows us to answer the question of which words to choose when communicating negative information. On the other hand, we show that investors trade not only upon facts in financial disclosures but are distracted by filler words and non-informative language. Practitioners - for example those in the fields of investor communications or marketing - can exploit our insights to enhance their writings based on the true perception of word choice.

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Information systems experience an ever-growing volume of unstructured data, particularly in the form of textual materials. This represents a rich source of information from which one can create value for people, organizations and businesses. For instance, recommender systems can benefit from automatically understanding preferences based on user reviews or social media. However, it is difficult for computer programs to correctly infer meaning from narrative content. One major challenge is negations that invert the interpretation of words and sentences. As a remedy, this paper proposes a novel learning strategy to detect negations: we apply reinforcement learning to find a policy that replicates the human perception of negations based on an exogenous response, such as a user rating for reviews. Our method yields several benefits, as it eliminates the former need for expensive and subjective manual labeling in an intermediate stage. Moreover, the inferred policy can be used to derive statistical inferences and implications regarding how humans process and act on negations.

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