QuoteOriginally posted by: Traden4AlphaQuoteOriginally posted by: katastrofaQuoteOriginally posted by: Traden4AlphaThe only part that is unclear to me is the aggregation function. Are the effects of particular actors, directors, genre, etc. additive, multiplicative, or something in between? If a movie has two star actors that each tend to double the ceteris paribus box office revenues of a movie, then will their combined effect add 200% to the revenues or will revenues be 4X greater?Copulas, babe :-)Usually, when there are complex interrelations between variables in the model, causality or memory, simple regression is not enough and one goes for MC simulations. I'm not surprised movie industry uses them too since they have so much data.Good point. Copulas seems like a good way to go but how do copulas deal with, for example, four dimensions of discrete independent variables that are very sparsely combined to reveal sample size of near-1 values in the one dependent variable (revenue or profit)?Discrete variables are not a problem. What does " very sparsely combined to reveal sample size of near-1 values" mean? Sorry
@PaulIf that was an actual question, dynamical simulations are usually used to calculate various utility functions (be it profit or revenue) - and this is typically done for different scenarios (e.g. investment strategies, spendings structure, logistics, etc.). The next step is sensitivity analysis or shock tests, which is supposed to provide risk assessment. It's no rocket science and such simulations are quite straightforward. It's nothing like in physics when they show you experimental data and ask about the known or new physical mechanism behind them.