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DavidJN
Posts: 242
Joined: July 14th, 2002, 3:00 am

Re: Proof of the invisible

August 25th, 2022, 6:44 pm

An actual market is a heuristic? That’s a bit of an ivory tower posture, no? Are there irrational actors in chemical and physical processes? Irrationality is a lot more than the outcome of a random number generator.
 
Mercadian
Posts: 39
Joined: July 24th, 2020, 4:22 pm

Re: Proof of the invisible

August 25th, 2022, 8:24 pm

An actual market is a heuristic? That’s a bit of an ivory tower posture, no? Are there irrational actors in chemical and physical processes? Irrationality is a lot more than the outcome of a random number generator.
I couldn't be farther away from Ivory Tower material, if anything I claim to know little to nothing at all... so don't get me wrong I wasn't using heuristic in a demeaning way, our entire world is made up of them, in fact I see it just as the word we assigned to "we're working on it" and in that sense I do think exchanges are a great starting point, probably the best we have (in the finance and economics field anyway), but to me its still just an approximation of what Adam Smith meant by the Invisible Hand, and I do think there're other fields with techniques that could help unlock further knowledge around this question.
 
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katastrofa
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Joined: August 16th, 2007, 5:36 am
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Re: Proof of the invisible

August 26th, 2022, 7:20 pm

The exchange indeed seems like a convenient choice as a heuristic, but in reality I feel this question is more analogous to how you would model ecological systems, chemical reactions, metabolism or a computational collective intelligence... the work of Tadeusz Szuba or Doyne Farmer seem to be on the right track.
That's very interesting. I modelled wicked systems numerically for several organisations and businesses a couple of years back, but I never thought about (or felt the need for) analysing their nature mathematically - strictly mathematically. It still seems nobody is trying to do it. We did solve quite a lot in physics for similar in some aspects, but obviously simpler, open quantum (not relevant here) systems (that's the microscale picture, and in macroscale they give non-equilibrium thermodynamics). I never thought of it as a problem mathematically similar to the optimisation if a cost function when training a deep neural network (a non-convex function) using gradient descent methods.