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Byrne17y00

BJK is on to something: the non-emergent description of a market crash is something like "IF the Fed is raising rates and the economy is slowing down and investors are too leveraged and ... ... ... then the market will crash," while the emergence theory might define investor behavior and note that it will result in periodic booms and crashes, without special rules to govern either. That's the essence of emergence: simple universal rules rather than complex specific rules.

It might feel like junk science because it crosses disciplinary borders, but that doesn't make it invalid.

Byrne17y60

Is there any way to set up a classroom (or an educational system) so that these students would get the right answer? Alternatively, is it even desirable?

If you teach students to think this way, you're saying "The world is governed by comprehensible scientific laws -- which is irrelevant, because people are constantly screwing with you." This experiment might be useful in a physics class for lawyers (who would probably catch on) or conspiracy theorists (who would, at least, have more entertaining hypotheses).

A compromise might be for the teacher to not just ask for an explanation, but ask for a testable explanation, and reward people for coming up with a theory they can falsify. The sad truth is that there's one more group that would figure out the answer right away: Creationists.

Byrne17y30

On the other hand, each new argument might reduce the implicit quality of the arguers. Imagine a succession of wilder excuses, rather than a series of increasingly damning data, and you could justify the hawkish Freedonian's view.

Perhaps the way to avoid both of these strategies is to address new evidence in batches. First, you and the hawks add up all your arguments. Then you state them, and consider. A week later, you both state all the new evidence that's come to light since, address how it affects your interpretation of the old data, etc.

You don't want a situation like the evolution/creationism debate, in which creationists are ever ready to point out new gaps in the fossil record (apparently unaware that filling in a gap between A and C creates two new gaps -- between A and B and between B and C).

Byrne17y40

One fascinating thing about Enron is that they found a way to corrupt their own standards. They were huge fans of marking assets to market -- which could have averted both savings and loan crises, kept Executive Life from collapsing, averted the Japanese banking crisis, etc. On top of that, they loved incentive-based compensation.

This all fell apart when some Enron traders became the market: if you get paid based on prices, and you set prices, the rest of the Enron story is inevitable.

Byrne17y00

I believe Egan-Jones once downgraded US debt to AA because of our balance of payments problems and our rather irresponsible spending habits. I suppose Taleb's tactic would make sense if one of the Swans you were betting on was a treasury default.

Byrne17y-10

You're ignoring the information effects. Your point is valid if every applicant applies only for the best possible grant, but if there are 20 applicants and 20 funders, the odds of that are low -- and the more applications per researcher, the higher those odds get.

Byrne17y40

Games have trouble satisfying creative urges -- to the extent that they do, they're just a medium for classic creativity, rather than a time-wasting game. It's no accident that lots of programming talent is being expended on a more dynamic version of Second Life, and I can certainly see game-like (or at least hyper-competitive )features in Wikipedia -- which is a lot like a version of trivial pursuit that happens to output an encyclopedia). It's true that as games get more compelling, they'll turn into evolutionary dead ends -- but I strongly suspect that the most compelling games are the ones that take advantage of our evolutionary instincts by tricking us into doing what makes evolutionary sense.