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I understand the concept of modelling, something the economists and stats people are completely missing. This is fundamentally a modelling error. They are usin

I understand the concept of modelling, something the economists and stats people are completely missing. This is fundamentally a modelling error. They are using valid maths that models the wrong scenario. Consider a group of 1,000,000 people making gambles. In traditional economics a rational actor will make decisions that maximize the SUM of the 1,000,000 rational actors money. In ergodicity economics a rational actor will make decisions that maximize it's money. A subtle distinction, but as a Comp Sci PhD I can tell you that small modelling error has utterly fatal consequences for large parts of economics. Prospect theory for example is written off. Physics PhDs also do modelling. You can see this as a knowledge gap in understanding of a typical economist or stats person, which is why they are having such difficultly in understanding Ole Peters work.

bradleyjg 6y ago
The entirety of two fields don’t understand modeling but luckily we have Computer Science, and of course Physics, PhDs to solve all problems in all fields. You have to be aware of how this comes off, right? This is all tongue in cheek?!? I mean your comment might as well have said “So, why does <your field> need a whole journal, anyway?”
- ReflectedImage 6y ago
  The maths says they are wrong. There is nothing more to say really. https://www.youtube.com/watch?v=mGBxUNaQI1I https://www.youtube.com/watch?v=mGBxUNaQI1I
  - bradleyjg 6y ago
    In that case why the appeal to your own authority “as a Computer Science PhD” instead of just showing the math? You are trying to have your cake and eat it too—-no credentials matter except your own.
    - ReflectedImage 6y ago
      Here's the maths: https://aip.scitation.org/doi/full/10.1063/1.4940236 https://aip.scitation.org/doi/full/10.1063/1.4940236 https://ergodicityeconomics.files.wordpress.com/2018/06/ergodicity_economics.pdf https://ergodicityeconomics.files.wordpress.com/2018/06/ergo...
      - sweezyjeezy 6y ago
        It sounds like you don't have formal experience in economics - how can you possibly so sure of yourself because the maths looks good to you? Especially when experts are saying that the paper is flawed - this should at least give you some pause? As you've said in this thread - economics is not a hard science like physics or comp-sci. So then surely you NEED domain knowledge to make bold claims about what is and isn't broken in economics?
        ReflectedImage 6y ago
        Well actually it's pretty easy. I know the difference between Ensemble average and Time average. I can see that EUT is using Ensemble average in place of Time average and is therefore wrong. If you want to determine who is right that is all you need to know. To simplify this for you, if you saw someone who in their maths equations swapped mean and median averages and told you that their maths usually gives the right answer. What would you think? "how can you possibly so sure of yourself because the maths looks good to you?" Because I know for certain. "Especially when experts are saying" A nobel prize winning physicist has signed their name on it (Previous paper in the line). Now do you really think the nobel prize winning physicist is wrong or some annoyed economists on twitter are wrong?
        sweezyjeezy 6y ago
        Well I work in machine learning, where quite often mathematical 'fudge factors' are used over something more rigorous - because they just work better on real world data. So I'd be pretty sympathetic actually, and I have a PhD in maths. I barely know any economics but: "Would a person ever prefer a process [A] that, after three rounds, diminishes wealth from US$10,000 to 0.5 cents over one [B] that yields a 99.9% chance of US$10,000,000 and otherwise US$0? Ergodic theory predicts [A] [... but] [v]irtually everyone will prefer B" This suggests to me like the maths may not be all you need to know about who is right and wrong. Secondly, you've appealed to the authority of one advocate's Nobel prize IN PHYSICS to assert that this paper in economics is correct. I believe the bunch of salty critics on Twitter (and Reddit, this thread, also in official rebuttals published in Nature), from people who actually work in the domain - should at least make you entertain the possibility that you are wrong about the correctness/importance/applicability of this paper.
ulucs 6y ago
> In traditional economics a rational actor will make decisions that maximize the SUM of the 1,000,000 rational actors money ??? Have you not heard of competitive equilibria at all? Is game theory outside of the realm of traditional economics? > Prospect theory for example is written off. Yeah, it's so written off that the authors received the biggest award in economics for their works in behavioral economics.
bopbeepboop 6y ago
It’s interesting: I spent a year developing platforms for PhD economists, and I would generally describe their work as “precisely wrong” for these reasons. We ended up starting two math research programs to try and keep them from building errors into our system: 1. Forcing them to actually check their math, because we discovered multiple math errors that drastically changed the results. 2. Started researching “assumption continuity” to see if we could define some notion of “small change in axiom -> small change in model” test to keep them from assuming “sharp” things, where if they were a little wrong the whole model was garbage. It’s literally a research problem in industry to keep PhD economists from cooking the books and claiming major conclusions.

bradleyjg 6y ago

The entirety of two fields don’t understand modeling but luckily we have Computer Science, and of course Physics, PhDs to solve all problems in all fields. You have to be aware of how this comes off, right? This is all tongue in cheek?!? I mean your comment might as well have said “So, why does <your field> need a whole journal, anyway?”

ReflectedImage 6y ago
The maths says they are wrong. There is nothing more to say really. https://www.youtube.com/watch?v=mGBxUNaQI1I https://www.youtube.com/watch?v=mGBxUNaQI1I
- bradleyjg 6y ago
  In that case why the appeal to your own authority “as a Computer Science PhD” instead of just showing the math? You are trying to have your cake and eat it too—-no credentials matter except your own.
  - ReflectedImage 6y ago
    Here's the maths: https://aip.scitation.org/doi/full/10.1063/1.4940236 https://aip.scitation.org/doi/full/10.1063/1.4940236 https://ergodicityeconomics.files.wordpress.com/2018/06/ergodicity_economics.pdf https://ergodicityeconomics.files.wordpress.com/2018/06/ergo...
    - sweezyjeezy 6y ago
      It sounds like you don't have formal experience in economics - how can you possibly so sure of yourself because the maths looks good to you? Especially when experts are saying that the paper is flawed - this should at least give you some pause? As you've said in this thread - economics is not a hard science like physics or comp-sci. So then surely you NEED domain knowledge to make bold claims about what is and isn't broken in economics?
      - ReflectedImage 6y ago
        Well actually it's pretty easy. I know the difference between Ensemble average and Time average. I can see that EUT is using Ensemble average in place of Time average and is therefore wrong. If you want to determine who is right that is all you need to know. To simplify this for you, if you saw someone who in their maths equations swapped mean and median averages and told you that their maths usually gives the right answer. What would you think? "how can you possibly so sure of yourself because the maths looks good to you?" Because I know for certain. "Especially when experts are saying" A nobel prize winning physicist has signed their name on it (Previous paper in the line). Now do you really think the nobel prize winning physicist is wrong or some annoyed economists on twitter are wrong?
        sweezyjeezy 6y ago
        Well I work in machine learning, where quite often mathematical 'fudge factors' are used over something more rigorous - because they just work better on real world data. So I'd be pretty sympathetic actually, and I have a PhD in maths. I barely know any economics but: "Would a person ever prefer a process [A] that, after three rounds, diminishes wealth from US$10,000 to 0.5 cents over one [B] that yields a 99.9% chance of US$10,000,000 and otherwise US$0? Ergodic theory predicts [A] [... but] [v]irtually everyone will prefer B" This suggests to me like the maths may not be all you need to know about who is right and wrong. Secondly, you've appealed to the authority of one advocate's Nobel prize IN PHYSICS to assert that this paper in economics is correct. I believe the bunch of salty critics on Twitter (and Reddit, this thread, also in official rebuttals published in Nature), from people who actually work in the domain - should at least make you entertain the possibility that you are wrong about the correctness/importance/applicability of this paper.

ulucs 6y ago

> In traditional economics a rational actor will make decisions that maximize the SUM of the 1,000,000 rational actors money ??? Have you not heard of competitive equilibria at all? Is game theory outside of the realm of traditional economics? > Prospect theory for example is written off. Yeah, it's so written off that the authors received the biggest award in economics for their works in behavioral economics.

bopbeepboop 6y ago

It’s interesting: I spent a year developing platforms for PhD economists, and I would generally describe their work as “precisely wrong” for these reasons. We ended up starting two math research programs to try and keep them from building errors into our system: 1. Forcing them to actually check their math, because we discovered multiple math errors that drastically changed the results. 2. Started researching “assumption continuity” to see if we could define some notion of “small change in axiom -> small change in model” test to keep them from assuming “sharp” things, where if they were a little wrong the whole model was garbage. It’s literally a research problem in industry to keep PhD economists from cooking the books and claiming major conclusions.