Fuzzy bridged refinement domain adaptation: Long-term bank failure prediction

Publisher:
World Scientific
Publication Type:
Journal Article
Citation:
International Journal of Computational Intelligence and Applications, 2013, 12 (1), pp. 1 - 17
Issue Date:
2013-01
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Machine learning methods, such as neural network (NN) and support vector machine, assume that the training data and the test data are drawn from the same distribution. This assumption may not be satisfied in many real world applications, like long-term financial failure prediction, because the training and test data may each come from different time periods or domains. This paper proposes a novel algorithm known as fuzzy bridged refinement-based domain adaptation to solve the problem of long-term prediction. The algorithm utilizes the fuzzy system and similarity concepts to modify the target instances' labels which were initially predicted by a shift-unaware prediction model. The experiments are performed using three shift-unaware prediction models based on nine different settings including two main situations: (1) there is no labeled instance in the target domain; (2) there are a few labeled instances in the target domain. In these experiments bank failure financial data is used to validate the algorithm. The results demonstrate a significant improvement in the predictive accuracy, particularly in the second situation identified above
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