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Friday, February 5, 2016

Exploring gambles reveals foundational difficulty behind economic theory (and a solution)


http://phys.org/news/2016-02-exploring-gambles-reveals-foundational-difficulty.html

This is a very interesting article on economic theory and the problems inherent in the assumptions that economists make.

Interestingly enough, I forwarded this to Nassim Nicholas Taleb and he followed up with a short blurb on Facebook. 

Just found out I was not alone in finding something weird in economists not understanding dynamic vs static ruin problems. 
It is a strange feeling to realize the answer to the question "Is it me or are they blind to something obvious?" is "no, it is not me". 
Murray Gell-Mann and colleague found the SAME point (though expressed in a more physical setting).

Here is a link to his ideas on the subject. 

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