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But, aren't finical systems a sociological science, rather than a mathematical model? In economies, people, politics, and their dispositions, their sentiments,
by TheSpiceIsLife 4y ago
But, aren't finical systems a sociological science, rather than a mathematical model?
In economies, people, politics, and their dispositions, their sentiments, dominate.
How do you model human responses to local, national, regional, and global events. How do you model human cascades?
- lottin 4y agoMathematical models are that, models—a simplified version of a particular phenomenon. Economic models are no different, in particular they presuppose, among other things, that economic agents behave rationally [1]. [1] https://en.wikipedia.org/wiki/Homo_economicus https://en.wikipedia.org/wiki/Homo_economicus
- TheSpiceIsLife 4y agoThank you for your response, I shall read that Wikipedia entry when I sober up. Australian East Coast Saturday night wooo!
- thelamest 4y agoEconomic “rationality” sometimes gets a bad rap, but it’s more defensible than it may appear and provides a well-circumscribed, workable general foundation to expand on. In simple versions: rational preferences (which include indifference) are transitive and complete, and people pursue these goals. That’s all. Symmetric violations wash away in the aggregate, and asymmetric can be included, e.g. as loss aversion. Criticism of “rationality” is often stuck in late 19th to mid 20th century debates that were since generally resolved.
- deleted 4y ago[deleted]