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Right, power laws are extremely common, and all it says is that some aspect of the distribution is scale-invariant, but without saying why. For example, most co
by scottmsul 10y ago
Right, power laws are extremely common, and all it says is that some aspect of the distribution is scale-invariant, but without saying why. For example, most companies are scalable, so it's no surprise that company valuations follow a power law. And since investors/founders own such large shares of companies, that would help explain why the 1% follows a power law. But as this article claims, if people gamble on log-scales, that would also create a power law. Power laws are so common and general, I find it difficult to believe that a power law is evidence of one way or the other.
- josephdviviano 10y agoThanks -- does the fact that the top 1% and bottom 99% show different distributions not imply they are gambling on different scales though? Is it as simple as the 1% gamble on a log scale and the bottom 99% gamble on a linear scale?