Time for a Change: Introducing irreversible time in economics - Dr Ole Peters
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- Опубликовано: 17 дек 2012
- An exploration of the remarkable consequences of using Boltzmann's 1870s probability theory and cutting-edge 20th Century mathematics in economic settings. An understanding of risk, market stability and economic inequality emerges.
The lecture presents two problems from economics: the leverage problem "by how much should an investment be leveraged", and the St Petersburg paradox. Neither can be solved with the concepts of randomness prevalent in economics today. However, owing to 20th-century developments in mathematics these problems have complete formal solutions that agree with our intuition. The theme of risk will feature prominently, presented as a consequence of irreversible time.
A lecture by Dr Ole Peters
The transcript and downloadable versions of the lecture are available from the Gresham College website:
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I look forward to a whole stream of new economic and financial theories once the profession embraces the ideas Dr Peters has presented!
Thanks for this clear, thoughtful and inspiring talk! Yet again shows that it's really worth paying attention to details. Also contained the most thorough and damning criticism of GDP as a measure of individual progress I've come across.
I really enjoyed it. At first I was not very impressed but in the end it brings out good conclusions and helps with the journey to make better decisions. You need to be patient and it has depth of understanding to help you search for more. Thank you for the upload.
great reinvention of the 6-sigma principal, and explicitly normal distribution, good job
Very fascinating, interesting and understandable, even for the layperson like myself
Wonderful talk, and the part of history is also quite cool
Explains why the banks are sitting on cash they are supposed to be lending. They know all about this and now we do to. Thanks for explaining this.
The result of the losing time average example is the result of wagering too much of your bankroll on each flip - the fascinating result of the Kelly criterion is that despite having favorable odds in a wager, wagering too high a fraction of your bankroll will inevitably leave you in ruin.
In this particular simulation, could the ensemble average be up-trending because the data was left-censored at $0? It seems that way from both the graph of earnings for which noises were taken out by increasing the trial number and the histogram of earnings. Also, I wonder if path-dependence could explain why the time-perspective does not match the ensemble perspective. As we average ensemble, the initial losers and the initial winners, who may set out for very different "paths" or earnings profiles, could cancel each other out, but as we follow one individual, the path could be quite dependent on who we pick, the players who start with a (few) win(s) or a (few) losses. I haven't finished the video yet, and I hope to see how many individuals who started with a win (loss) ended up losing (winning).
What do you mean left-censored? Since this is multiplicative, the amount can never be less than zero. Most graphs he shows are log graphs. On the histogram, $0 would be infinitely far to the left, so he chooses an arbitrary cutoff of $1.
Much is said about the failure of Capitalism, (except the context usually applies to crony capitalism criminality), which in my own experience, meant having a knowledge of values invested in activities that would return a growth in benefits for all the investors involved.
It seems as if Markets are Casinos run by Quants and cronies, and genuine Capital Management of Investment in well designed value system by transparent intent is incidental (?)
It's always now and exists continuously in an "ensemble" of constants..., mass produced by infinity. The shape of the whole arrangement is comprehensible only because of this parallelism and so the uniqueness is permanently changing, not lost in context, only some arrangement of content. Or as stated in the lecture, we wouldn't have any stability to trust in, systematically.
The implication is that an economy is zero sum in human investment, materially, (in the end, everyone dies), and profits/lives for a while from the exploitation and conversion of natural resources. Ie it's the vehicle of consumption and resource/value management. Real wealth is access to natural resources, (including the peaceful accumulation of knowledge/intelligence) (?).
An interesting theory!
Интересная теория!
That is fake but not a theory! If you win 50% from 100$ you increase your count to 150/100 = 1.5 times. If you loss 40% you decrease your count to 100/60 = 1.66 times. This is a loosing game! I was astonished so many people thinking that this delirium will flip the economy.
@@dagiva1 That was my first reaction. Make an effort of watching the first 10 minutes.
The significance to be abstracted from the lecture regarding "ergodicity" is the same principle as eternal continuity of every possible positioning point, ..that is, Time Duration Timing and navigation in existence is the "insideout" distribution of e-Pi-i resonance imaging properties potential possibilities Inflation +/- Temporal Superposition-point Singularity, and various other probabilistic wave-package modulation models.., altogether under The Calculus / Mathematics.
Time-> "Energy is neither created or destroyed", but in differential/duration sequences of relative timing connection rates, ..in potential possibility positioning probabilities, ..the cause-effect of positioning is infinitely variable in e-Pi-i resonance/Superspin by the inherent Principle In-form-ation formulae in conception that is axial-tangential differentiation at the Central Limit, also Eternity-now Polar-Cartesian probability at/in 1-0Duration Origin, zero-infinity/eternity Interval, here-now-forever. (A Rose by any other name.. to exhaustion)
The actual Quantum Operator/tunneling-jumping of singularity navigation positioning is "mind blinding", but it's amenable to resolution by teaching temporal navigation Mathematics.
Temporal Superposition-point Singularity positioning is "Geometer's" Mathematics in Actuality.
True algorithm for game.
1. Divide all deposit into 100 parts.
2. Play
3. On 50 parts we had took 60% . On 50 parts had took 150%.
4. Combine 100 deposits.
5. Take 105% from original deposit.
6. Repeat
единственная проблема - чем больше число шагов, тем на большее количество сумм придется разделять исходный депозит, чтобы набрать необходимое количество усреднений в пространстве многоходовых элементарных исходов, и таким образом приблизиться к теоретическому выигрышу.
This is just 0.01 leverage and is suboptimal
This really isnt that radical. It has been known for a long time. I knew about the supremacy of geometric returns over arithmetic returns when I was a 1st year undergrad in finance. Btw, the only reason why the time-average growth rate is negative is because (mean-0.5*sigma^2)
not sure why youtube suggested Wheeler's "One Electron Universe hypothesis" after watching this...
What he said at about 48:43: "Predictions are what you use to test your hypothesis", is just wrong. Measured aspects of reality are what you use to test your hypothesis...
Nonsense. A fair game would be +50% versus -33.3%. To reverse a 50% increase you should decrease by 33.3% percent, not 40. All this presentation is based on a well known gambling trick for those who is unaware of trivial math.
Yes, if you loose once and win once in +50%/-33.3% game, you will have zero. At the same time if one player loose and one player wins after one step, they will have $150 and $66.6 total $216.6 taking $16.6 out of nowhere. Is this fair? Whole this video is about the difference.
Best answer here