Instruct: Identify the main and secondary category of Arxiv papers based on the titles and abstracts
Query: On the Statistical Differences between Binary Forecasts and Real World
  Payoffs   What do binary (or probabilistic) forecasting abilities have to do with
overall performance? We map the difference between (univariate) binary
predictions, bets and "beliefs" (expressed as a specific "event" will
happen/will not happen) and real-world continuous payoffs (numerical benefits
or harm from an event) and show the effect of their conflation and
mischaracterization in the decision-science literature. We also examine the
differences under thin and fat tails. The effects are:
  A- Spuriousness of many psychological results particularly those documenting
that humans overestimate tail probabilities and rare events, or that they
overreact to fears of market crashes, ecological calamities, etc. Many
perceived "biases" are just mischaracterizations by psychologists. There is
also a misuse of Hayekian arguments in promoting prediction markets.
  We quantify such conflations with a metric for "pseudo-overestimation".
  B- Being a "good forecaster" in binary space doesn't lead to having a good
actual performance}, and vice versa, especially under nonlinearities. A binary
forecasting record is likely to be a reverse indicator under some classes of
distributions. Deeper uncertainty or more complicated and realistic probability
distribution worsen the conflation .
  C- Machine Learning: Some nonlinear payoff functions, while not lending
themselves to verbalistic expressions and "forecasts", are well captured by ML
or expressed in option contracts.
  D- Fattailedness: The difference is exacerbated in the power law classes of
probability distributions.

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The categories of this paper are: hep-ph
28
The categories of this paper are: alg-geom
21
The categories of this paper are: adap-org
12
The categories of this paper are: nucl-th
37
The categories of this paper are: supr-con
5
The categories of this paper are: gr-qc
14
The categories of this paper are: math-ph
22
The categories of this paper are: chao-dyn
16
The categories of this paper are: stat
11
The categories of this paper are: hep-lat
20
The categories of this paper are: acc-phys
2
The categories of this paper are: math
9
The categories of this paper are: nlin
6
The categories of this paper are: astro-ph
30
The categories of this paper are: q-alg
32
The categories of this paper are: atom-ph