• Journal of Intelligence and Information Systems
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• v.22 no.4
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• pp.247-264
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• 2016

With the rapid acceleration of low-birth rate and population aging, the employment of the neglected groups of people including the middle aged class is a crucial issue in South Korea. In particular, in the 2010s, the number of the middle aged who want to find a new job after retirement age is significantly increasing with the arrival of the retirement time of the baby boom generation (born 1955-1963). Despite the importance of matching jobs to this emerging middle aged class, private job portals as well as the Korean government do not provide any online job service tailored for them. A gigantic amount of job information is available online; however, the current recruiting systems do not meet the demand of the middle aged class as their primary targets are young workers. We are in dire need of a specially designed recruiting system for the middle aged. Meanwhile, when users are searching the desired occupations on the Worknet website, provided by the Korean Ministry of Employment and Labor, users are experiencing discomfort to search for similar jobs because Worknet is providing filtered search results on the basis of exact matches of a preferred job code. Besides, according to our Worknet data analysis, only about 24% of job seekers had landed on a job position consistent with their initial preferred job code while the rest had landed on a position different from their initial preference. To improve the situation, particularly for the middle aged class, we investigate a soft job matching technique by performing the following: 1) we review a user behavior logs of Worknet, which is a public job recruiting system set up by the Korean government and point out key system design implications for the middle aged. Specifically, we analyze the job postings that include preferential tags for the middle aged in order to disclose what types of jobs are in favor of the middle aged; 2) we develope a new occupation classification scheme for the middle aged, Korea Occupation Classification for the Middle-aged (KOCM), based on the similarity between jobs by reorganizing and modifying a general occupation classification scheme. When viewed from the perspective of job placement, an occupation classification scheme is a way to connect the enterprises and job seekers and a basic mechanism for job placement. The key features of KOCM include establishing the Simple Labor category, which is the most requested category by enterprises; and 3) we design MOMA (Middle-aged Occupation Matching Algorithm), which is a hybrid job matching algorithm comprising constraint-based reasoning and case-based reasoning. MOMA incorporates KOCM to expand query to search similar jobs in the database. MOMA utilizes cosine similarity between user requirement and job posting to rank a set of postings in terms of preferred job code, salary, distance, and job type. The developed system using MOMA demonstrates about 20 times of improvement over the hard matching performance. In implementing the algorithm for a web-based application of recruiting system for the middle aged, we also considered the usability issue of making the system easier to use, which is especially important for this particular class of users. That is, we wanted to improve the usability of the system during the job search process for the middle aged users by asking to enter only a few simple and core pieces of information such as preferred job (job code), salary, and (allowable) distance to the working place, enabling the middle aged to find a job suitable to their needs efficiently. The Web site implemented with MOMA should be able to contribute to improving job search of the middle aged class. We also expect the overall approach to be applicable to other groups of people for the improvement of job matching results.

• Journal of Intelligence and Information Systems
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• v.20 no.3
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• pp.59-76
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• 2014

The revolution of smart media such as smart phone, smart TV and tablets has brought easiness for people to get contents and related information anywhere and anytime. The characteristics of the smart media have changed user behavior for watching the contents from passive attitude into active one. Video is a kind of multimedia resources and widely used to provide information effectively. People not only watch video contents, but also search for related information to specific objects appeared in the contents. However, people have to use extra views or devices to find the information because the existing video contents provide no information through the contents. Therefore, the interaction between user and media is becoming a major concern. The demand for direct interaction and instant information is much increasing. Digital media environment is no longer expected to serve as a one-way information service, which requires user to search manually on the internet finding information they need. To solve the current inconvenience, an interactive service is needed to provide the information exchange function between people and video contents, or between people themselves. Recently, many researchers have recognized the importance of the requirements for interactive services, but only few services provide interactive video within restricted functionality. Only cooking domain is chosen for an interactive cooking video query service in this research. Cooking is receiving lots of people attention continuously. By using smart media devices, user can easily watch a cooking video. One-way information nature of cooking video does not allow to interactively getting more information about the certain contents, although due to the characteristics of videos, cooking videos provide various information such as cooking scenes and explanation for each recipe step. Cooking video indeed attracts academic researches to study and solve several problems related to cooking. However, just few studies focused on interactive services in cooking video and they still not sufficient to provide the interaction with users. In this paper, an interactive cooking video query service system with linked data to provide the interaction functionalities to users. A linked recipe schema is used to handle the linked data. The linked data approach is applied to construct queries in systematic manner when user interacts with cooking videos. We add some classes, data properties, and relations to the linked recipe schema because the current version of the schema is not enough to serve user interaction. A web crawler extracts recipe information from allrecipes.com. All extracted recipe information is transformed into ontology instances by using developed instance generator. To provide a query function, hundreds of questions in cooking video web sites such as BBC food, Foodista, Fine cooking are investigated and analyzed. After the analysis of the investigated questions, we summary the questions into four categories by question generalization. For the question generalization, the questions are clustered in eleven questions. The proposed system provides an environment associating UI (User Interface) and UX (User Experience) that allow user to watch cooking videos while obtaining the necessary additional information using extra information layer. User can use the proposed interactive cooking video system at both PC and mobile environments because responsive web design is applied for the proposed system. In addition, the proposed system enables the interaction between user and video in various smart media devices by employing linked data to provide information matching with the current context. Two methods are used to evaluate the proposed system. First, through a questionnaire-based method, computer system usability is measured by comparing the proposed system with the existing web site. Second, the answer accuracy for user interaction is measured to inspect to-be-offered information. The experimental results show that the proposed system receives a favorable evaluation and provides accurate answers for user interaction.

• Journal of Intelligence and Information Systems
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• v.21 no.3
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• pp.79-99
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• 2015

The prediction of bankruptcy has been extensively studied in the accounting and finance field. It can have an important impact on lending decisions and the profitability of financial institutions in terms of risk management. Many researchers have focused on constructing a more robust bankruptcy prediction model. Early studies primarily used statistical techniques such as multiple discriminant analysis (MDA) and logit analysis for bankruptcy prediction. However, many studies have demonstrated that artificial intelligence (AI) approaches, such as artificial neural networks (ANN), decision trees, case-based reasoning (CBR), and support vector machine (SVM), have been outperforming statistical techniques since 1990s for business classification problems because statistical methods have some rigid assumptions in their application. In previous studies on corporate bankruptcy, many researchers have focused on developing a bankruptcy prediction model using financial ratios. However, there are few studies that suggest the specific types of bankruptcy. Previous bankruptcy prediction models have generally been interested in predicting whether or not firms will become bankrupt. Most of the studies on bankruptcy types have focused on reviewing the previous literature or performing a case study. Thus, this study develops a model using data mining techniques for predicting the specific types of bankruptcy as well as the occurrence of bankruptcy in Korean small- and medium-sized construction firms in terms of profitability, stability, and activity index. Thus, firms will be able to prevent it from occurring in advance. We propose a hybrid approach using two artificial neural networks (ANNs) for the prediction of bankruptcy types. The first is a back-propagation neural network (BPN) model using supervised learning for bankruptcy prediction and the second is a self-organizing map (SOM) model using unsupervised learning to classify bankruptcy data into several types. Based on the constructed model, we predict the bankruptcy of companies by applying the BPN model to a validation set that was not utilized in the development of the model. This allows for identifying the specific types of bankruptcy by using bankruptcy data predicted by the BPN model. We calculated the average of selected input variables through statistical test for each cluster to interpret characteristics of the derived clusters in the SOM model. Each cluster represents bankruptcy type classified through data of bankruptcy firms, and input variables indicate financial ratios in interpreting the meaning of each cluster. The experimental result shows that each of five bankruptcy types has different characteristics according to financial ratios. Type 1 (severe bankruptcy) has inferior financial statements except for EBITDA (earnings before interest, taxes, depreciation, and amortization) to sales based on the clustering results. Type 2 (lack of stability) has a low quick ratio, low stockholder's equity to total assets, and high total borrowings to total assets. Type 3 (lack of activity) has a slightly low total asset turnover and fixed asset turnover. Type 4 (lack of profitability) has low retained earnings to total assets and EBITDA to sales which represent the indices of profitability. Type 5 (recoverable bankruptcy) includes firms that have a relatively good financial condition as compared to other bankruptcy types even though they are bankrupt. Based on the findings, researchers and practitioners engaged in the credit evaluation field can obtain more useful information about the types of corporate bankruptcy. In this paper, we utilized the financial ratios of firms to classify bankruptcy types. It is important to select the input variables that correctly predict bankruptcy and meaningfully classify the type of bankruptcy. In a further study, we will include non-financial factors such as size, industry, and age of the firms. Thus, we can obtain realistic clustering results for bankruptcy types by combining qualitative factors and reflecting the domain knowledge of experts.

• Journal of Intelligence and Information Systems
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• v.16 no.3
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• pp.121-145
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• 2010

University timetabling depending on the educational environments of universities is an NP-hard problem that the amount of computation required to find solutions increases exponentially with the problem size. For many years, there have been lots of studies on university timetabling from the necessity of automatic timetable generation for students' convenience and effective lesson, and for the effective allocation of subjects, lecturers, and classrooms. Timetables are classified into a course timetable and an examination timetable. This study focuses on the former. In general, a course timetable for liberal arts is scheduled by the office of academic affairs and a course timetable for major subjects is scheduled by each department of a university. We found several problems from the analysis of current course timetabling in departments. First, it is time-consuming and inefficient for each department to do the routine and repetitive timetabling work manually. Second, many classes are concentrated into several time slots in a timetable. This tendency decreases the effectiveness of students' classes. Third, several major subjects might overlap some required subjects in liberal arts at the same time slots in the timetable. In this case, it is required that students should choose only one from the overlapped subjects. Fourth, many subjects are lectured by same lecturers every year and most of lecturers prefer the same time slots for the subjects compared with last year. This means that it will be helpful if departments reuse the previous timetables. To solve such problems and support the effective course timetabling in each department, this study proposes a university timetabling support system based on two phases. In the first phase, each department generates a timetable template from the most similar timetable case, which is based on case-based reasoning. In the second phase, the department schedules a timetable with the help of interactive user interface under the timetabling criteria, which is based on rule-based approach. This study provides the illustrations of Hanshin University. We classified timetabling criteria into intrinsic and extrinsic criteria. In intrinsic criteria, there are three criteria related to lecturer, class, and classroom which are all hard constraints. In extrinsic criteria, there are four criteria related to 'the numbers of lesson hours' by the lecturer, 'prohibition of lecture allocation to specific day-hours' for committee members, 'the number of subjects in the same day-hour,' and 'the use of common classrooms.' In 'the numbers of lesson hours' by the lecturer, there are three kinds of criteria : 'minimum number of lesson hours per week,' 'maximum number of lesson hours per week,' 'maximum number of lesson hours per day.' Extrinsic criteria are also all hard constraints except for 'minimum number of lesson hours per week' considered as a soft constraint. In addition, we proposed two indices for measuring similarities between subjects of current semester and subjects of the previous timetables, and for evaluating distribution degrees of a scheduled timetable. Similarity is measured by comparison of two attributes-subject name and its lecturer-between current semester and a previous semester. The index of distribution degree, based on information entropy, indicates a distribution of subjects in the timetable. To show this study's viability, we implemented a prototype system and performed experiments with the real data of Hanshin University. Average similarity from the most similar cases of all departments was estimated as 41.72%. It means that a timetable template generated from the most similar case will be helpful. Through sensitivity analysis, the result shows that distribution degree will increase if we set 'the number of subjects in the same day-hour' to more than 90%.

• Journal of Intelligence and Information Systems
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• v.16 no.3
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• pp.99-120
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• 2010

Due to the wide spread of customers' frequent access of non face-to-face services, there have been many attempts to improve customer satisfaction using huge amounts of data accumulated throughnon face-to-face channels. Usually, a call center is regarded to be one of the most representative non-faced channels. Therefore, it is important that a call center has enough agents to offer high level customer satisfaction. However, managing too many agents would increase the operational costs of a call center by increasing labor costs. Therefore, predicting and calculating the appropriate size of human resources of a call center is one of the most critical success factors of call center management. For this reason, most call centers are currently establishing a department of WFM(Work Force Management) to estimate the appropriate number of agents and to direct much effort to predict the volume of inbound calls. In real world applications, inbound call prediction is usually performed based on the intuition and experience of a domain expert. In other words, a domain expert usually predicts the volume of calls by calculating the average call of some periods and adjusting the average according tohis/her subjective estimation. However, this kind of approach has radical limitations in that the result of prediction might be strongly affected by the expert's personal experience and competence. It is often the case that a domain expert may predict inbound calls quite differently from anotherif the two experts have mutually different opinions on selecting influential variables and priorities among the variables. Moreover, it is almost impossible to logically clarify the process of expert's subjective prediction. Currently, to overcome the limitations of subjective call prediction, most call centers are adopting a WFMS(Workforce Management System) package in which expert's best practices are systemized. With WFMS, a user can predict the volume of calls by calculating the average call of each day of the week, excluding some eventful days. However, WFMS costs too much capital during the early stage of system establishment. Moreover, it is hard to reflect new information ontothe system when some factors affecting the amount of calls have been changed. In this paper, we attempt to devise a new model for predicting inbound calls that is not only based on theoretical background but also easily applicable to real world applications. Our model was mainly developed by the interactive decision tree technique, one of the most popular techniques in data mining. Therefore, we expect that our model can predict inbound calls automatically based on historical data, and it can utilize expert's domain knowledge during the process of tree construction. To analyze the accuracy of our model, we performed intensive experiments on a real case of one of the largest car insurance companies in Korea. In the case study, the prediction accuracy of the devised two models and traditional WFMS are analyzed with respect to the various error rates allowable. The experiments reveal that our data mining-based two models outperform WFMS in terms of predicting the amount of accident calls and fault calls in most experimental situations examined.

• Journal of Intelligence and Information Systems
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• v.25 no.4
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• pp.67-88
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• 2019

Webtoon is a Korean-style digital comics platform that distributes comics content produced using the characteristic elements of the Internet in a form that can be consumed online. With the recent rapid growth of the webtoon industry and the exponential increase in the supply of webtoon content, the need for effective webtoon content recommendation measures is growing. Webtoons are digital content products that combine pictorial, literary and digital elements. Therefore, webtoons stimulate consumer sentiment by making readers have fun and engaging and empathizing with the situations in which webtoons are produced. In this context, it can be expected that the sentiment that webtoons evoke to consumers will serve as an important criterion for consumers' choice of webtoons. However, there is a lack of research to improve webtoons' recommendation performance by utilizing consumer sentiment. This study is aimed at developing consumer sentiment pattern maps that can support effective recommendations of webtoon content, focusing on consumer sentiments that have not been fully discussed previously. Metadata and consumer sentiments data were collected for 200 works serviced on the Korean webtoon platform 'Naver Webtoon' to conduct this study. 488 sentiment terms were collected for 127 works, excluding those that did not meet the purpose of the analysis. Next, similar or duplicate terms were combined or abstracted in accordance with the bottom-up approach. As a result, we have built webtoons specialized sentiment-index, which are reduced to a total of 63 emotive adjectives. By performing exploratory factor analysis on the constructed sentiment-index, we have derived three important dimensions for classifying webtoon types. The exploratory factor analysis was performed through the Principal Component Analysis (PCA) using varimax factor rotation. The three dimensions were named 'Immersion', 'Touch' and 'Irritant' respectively. Based on this, K-Means clustering was performed and the entire webtoons were classified into four types. Each type was named 'Snack', 'Drama', 'Irritant', and 'Romance'. For each type of webtoon, we wrote webtoon-sentiment 2-Mode network graphs and looked at the characteristics of the sentiment pattern appearing for each type. In addition, through profiling analysis, we were able to derive meaningful strategic implications for each type of webtoon. First, The 'Snack' cluster is a collection of webtoons that are fast-paced and highly entertaining. Many consumers are interested in these webtoons, but they don't rate them well. Also, consumers mostly use simple expressions of sentiment when talking about these webtoons. Webtoons belonging to 'Snack' are expected to appeal to modern people who want to consume content easily and quickly during short travel time, such as commuting time. Secondly, webtoons belonging to 'Drama' are expected to evoke realistic and everyday sentiments rather than exaggerated and light comic ones. When consumers talk about webtoons belonging to a 'Drama' cluster in online, they are found to express a variety of sentiments. It is appropriate to establish an OSMU(One source multi-use) strategy to extend these webtoons to other content such as movies and TV series. Third, the sentiment pattern map of 'Irritant' shows the sentiments that discourage customer interest by stimulating discomfort. Webtoons that evoke these sentiments are hard to get public attention. Artists should pay attention to these sentiments that cause inconvenience to consumers in creating webtoons. Finally, Webtoons belonging to 'Romance' do not evoke a variety of consumer sentiments, but they are interpreted as touching consumers. They are expected to be consumed as 'healing content' targeted at consumers with high levels of stress or mental fatigue in their lives. The results of this study are meaningful in that it identifies the applicability of consumer sentiment in the areas of recommendation and classification of webtoons, and provides guidelines to help members of webtoons' ecosystem better understand consumers and formulate strategies.

• Journal of Intelligence and Information Systems
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• v.25 no.2
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• pp.57-75
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• 2019

In this paper, we conducted a study focusing on the innovation direction of the documentary model on the Internet of Things industry, which is the most actively industrialized among the core technologies of the 4th Industrial Revolution. Policy, economic, social, and technical issues were derived using PEST analysis for global trend analysis. It also presented future prospects for the Internet of Things industry of ICT-related global research institutes such as Gartner and International Data Corporation. Global research institutes predicted that competition in network technologies will be an issue for industrial Internet (IIoST) and IoT (Internet of Things) based on infrastructure and platforms. As a result of the PEST analysis, developed countries are pushing policies to respond to the fourth industrial revolution through cooperation of private (business/ research institutes) led by the government. It was also in the process of expanding related R&D budgets and establishing related policies in South Korea. On the economic side, the growth tax of the related industries (based on the aggregate value of the market) and the performance of the entity were reviewed. The growth of industries related to the fourth industrial revolution in advanced countries overseas was found to be faster than other industries, while in Korea, the growth of the "technical hardware and equipment" and "communication service" sectors was relatively low among industries related to the fourth industrial revolution. On the social side, it is expected to cause enormous ripple effects across society, largely due to changes in technology and industrial structure, changes in employment structure, changes in job volume, etc. On the technical side, changes were taking place in each industry, representing the health and medical sectors and manufacturing sectors, which were rapidly changing as they merged with the technology of the Fourth Industrial Revolution. In this paper, various management methodologies for innovation of existing business model were reviewed to cope with rapidly changing industrial environment due to the fourth industrial revolution. In addition, four criteria were established to select a management model to cope with the new business environment: 'Applicability', 'Agility', 'Diversity' and 'Connectivity'. The expert survey results in an AHP analysis showing that Business Model Canvas is best suited for business model innovation methodology. The results showed very high importance, 42.5 percent in terms of "Applicability", 48.1 percent in terms of "Agility", 47.6 percent in terms of "diversity" and 42.9 percent in terms of "connectivity." Thus, it was selected as a model that could be diversely applied according to the industrial ecology and paradigm shift. Business Model Canvas is a relatively recent management strategy that identifies the value of a business model through a nine-block approach as a methodology for business model innovation. It identifies the value of a business model through nine block approaches and covers the four key areas of business: customer, order, infrastructure, and business feasibility analysis. In the paper, the expansion and application direction of the nine blocks were presented from the perspective of the IoT company (ICT). In conclusion, the discussion of which Business Model Canvas models will be applied in the ICT convergence industry is described. Based on the nine blocks, if appropriate applications are carried out to suit the characteristics of the target company, various applications are possible, such as integration and removal of five blocks, seven blocks and so on, and segmentation of blocks that fit the characteristics. Future research needs to develop customized business innovation methodologies for Internet of Things companies, or those that are performing Internet-based services. In addition, in this study, the Business Model Canvas model was derived from expert opinion as a useful tool for innovation. For the expansion and demonstration of the research, a study on the usability of presenting detailed implementation strategies, such as various model application cases and application models for actual companies, is needed.

• Journal of Intelligence and Information Systems
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• v.25 no.3
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• pp.221-238
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• 2019

Recently, companies and public institutions have been actively introducing chatbot services in the field of customer counseling and response. The introduction of the chatbot service not only brings labor cost savings to companies and organizations, but also enables rapid communication with customers. Advances in data analytics and artificial intelligence are driving the growth of these chatbot services. The current chatbot can understand users' questions and offer the most appropriate answers to questions through machine learning and deep learning. The advancement of chatbot core technologies such as NLP, NLU, and NLG has made it possible to understand words, understand paragraphs, understand meanings, and understand emotions. For this reason, the value of chatbots continues to rise. However, technology-oriented chatbots can be inconsistent with what users want inherently, so chatbots need to be addressed in the area of the user experience, not just in the area of technology. The Fourth Industrial Revolution represents the importance of the User Experience as well as the advancement of artificial intelligence, big data, cloud, and IoT technologies. The development of IT technology and the importance of user experience have provided people with a variety of environments and changed lifestyles. This means that experiences in interactions with people, services(products) and the environment become very important. Therefore, it is time to develop a user needs-based services(products) that can provide new experiences and values to people. This study proposes a chatbot development process based on user needs by applying the design thinking approach, a representative methodology in the field of user experience, to chatbot development. The process proposed in this study consists of four steps. The first step is 'setting up knowledge domain' to set up the chatbot's expertise. Accumulating the information corresponding to the configured domain and deriving the insight is the second step, 'Knowledge accumulation and Insight identification'. The third step is 'Opportunity Development and Prototyping'. It is going to start full-scale development at this stage. Finally, the 'User Feedback' step is to receive feedback from users on the developed prototype. This creates a "user needs-based service (product)" that meets the process's objectives. Beginning with the fact gathering through user observation, Perform the process of abstraction to derive insights and explore opportunities. Next, it is expected to develop a chatbot that meets the user's needs through the process of materializing to structure the desired information and providing the function that fits the user's mental model. In this study, we present the actual construction examples for the domestic cosmetics market to confirm the effectiveness of the proposed process. The reason why it chose the domestic cosmetics market as its case is because it shows strong characteristics of users' experiences, so it can quickly understand responses from users. This study has a theoretical implication in that it proposed a new chatbot development process by incorporating the design thinking methodology into the chatbot development process. This research is different from the existing chatbot development research in that it focuses on user experience, not technology. It also has practical implications in that companies or institutions propose realistic methods that can be applied immediately. In particular, the process proposed in this study can be accessed and utilized by anyone, since 'user needs-based chatbots' can be developed even if they are not experts. This study suggests that further studies are needed because only one field of study was conducted. In addition to the cosmetics market, additional research should be conducted in various fields in which the user experience appears, such as the smart phone and the automotive market. Through this, it will be able to be reborn as a general process necessary for 'development of chatbots centered on user experience, not technology centered'.

• Journal of Intelligence and Information Systems
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• v.26 no.4
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• pp.67-86
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• 2020

Recommender Systems have been huge influence users and business more and more. Recently the importance of E-commerce has been reached rapid growth greatly in world-wide COVID-19 pandemic. Recommender system is the center of E-commerce lively. Top ranked E-commerce managers mentioned that recommender systems have a major influence on customer's purchase such as about 50% of Netflix, Amazon sales from their recommender systems. Most algorithms have been focused on improving accuracy of recommender system regardless of novelty, diversity, serendipity etc. Recommender systems with only high accuracy cannot satisfy business long-term profit because of generating sales polarization. In addition, customers do not experience enjoyment of shopping from only focusing accuracy recommender system because customer's preference is changed constantly. Therefore, recommender systems with various values need to be developed for user's high satisfaction. Reranking is the most useful methodology to realize diversity of recommender system. In this paper, diversity of recommender system is represented through constructing high similarity with users who have different preference using each user's purchased item's category algorithm. It is distinguished from past research approach which is changing the algorithm of recommender system without user's diversity preference level. We tried to discover user's diversity preference level and observed the results how the effect was different according to user's diversity preference level. In addition, graph-based recommender system was used to show diversity through user's network, not collaborative filtering. In this paper, Amazon Grocery and Gourmet Food data was used because the low-involvement product, such as habitual product, foods, low-priced goods etc., had high probability to show customer's diversity. First, a bipartite graph with users and items simultaneously is constructed to make graph-based recommender system. However, each users and items unipartite graph also need to be established to show diversity of recommender system. The weight of each unipartite graph has played crucial role changing Jaccard Distance of item's category. We can observe two important results from the user's unipartite network. First, the user's diversity preference level is observed from the network and second, dissimilar users can be discovered in the user's network. Through the research process, diversity of recommender system is presented highly with small accuracy loss and optimalization for higher accuracy is possible controlling diversity ratio. This paper has three important theoretical points. First, this research expands recommender system research for user's satisfaction with various values. Second, the graph-based recommender system is developed newly. Third, the evaluation indicator of diversity is made for diversity. In addition, recommender systems are useful for corporate profit practically and this paper has contribution on business closely. Above all, business long-term profit can be improved using recommender system with diversity and the recommender system can provide right service according to user's diversity level. Lastly, the corporate selling low-involvement products have great effect based on the results.

• Journal of Intelligence and Information Systems
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• v.28 no.2
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• pp.237-262
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• 2022

There has been a growing interest in IPOs (Initial Public Offerings) due to the profitable returns that IPO stocks can offer to investors. However, IPOs can be speculative investments that may involve substantial risk as well because shares tend to be volatile, and the supply of IPO shares is often highly limited. Therefore, it is crucially important that IPO investors are well informed of the issuing firms and the market before deciding whether to invest or not. Unlike institutional investors, individual investors are at a disadvantage since there are few opportunities for individuals to obtain information on the IPOs. In this regard, the purpose of this study is to provide individual investors with the information they may consider when making an IPO investment decision. This study presents a model that uses machine learning and text analysis to predict whether an IPO stock price would move up or down after the first 5 trading days. Our sample includes 691 Korean IPOs from June 2009 to December 2020. The input variables for the prediction are three tone variables created from IPO prospectuses and quantitative variables that are either firm-specific, issue-specific, or market-specific. The three prospectus tone variables indicate the percentage of positive, neutral, and negative sentences in a prospectus, respectively. We considered only the sentences in the Risk Factors section of a prospectus for the tone analysis in this study. All sentences were classified into 'positive', 'neutral', and 'negative' via text analysis using TF-IDF (Term Frequency - Inverse Document Frequency). Measuring the tone of each sentence was conducted by machine learning instead of a lexicon-based approach due to the lack of sentiment dictionaries suitable for Korean text analysis in the context of finance. For this reason, the training set was created by randomly selecting 10% of the sentences from each prospectus, and the sentence classification task on the training set was performed after reading each sentence in person. Then, based on the training set, a Support Vector Machine model was utilized to predict the tone of sentences in the test set. Finally, the machine learning model calculated the percentages of positive, neutral, and negative sentences in each prospectus. To predict the price movement of an IPO stock, four different machine learning techniques were applied: Logistic Regression, Random Forest, Support Vector Machine, and Artificial Neural Network. According to the results, models that use quantitative variables using technical analysis and prospectus tone variables together show higher accuracy than models that use only quantitative variables. More specifically, the prediction accuracy was improved by 1.45% points in the Random Forest model, 4.34% points in the Artificial Neural Network model, and 5.07% points in the Support Vector Machine model. After testing the performance of these machine learning techniques, the Artificial Neural Network model using both quantitative variables and prospectus tone variables was the model with the highest prediction accuracy rate, which was 61.59%. The results indicate that the tone of a prospectus is a significant factor in predicting the price movement of an IPO stock. In addition, the McNemar test was used to verify the statistically significant difference between the models. The model using only quantitative variables and the model using both the quantitative variables and the prospectus tone variables were compared, and it was confirmed that the predictive performance improved significantly at a 1% significance level.