Sublime

“activity trap”:

Markets are driven by the actions of countless individuals, each reacting to his or her whims, the weather, and the news of the day. Remarkably, just as with army ants, out of all our individual actions emerges a higher order, a set of prices that allows us to buy and sell whatever we may desire.

Scientific models that seek to predict the consequences of human actions with some reasonable accuracy—such as game theoretical models of economic behavior—for the most part ignore human individuality in favor of aggregated outcomes.

There frankly is a hell of a lot of value in the game theory and economics literature.

Note that the economist Robert Lucas dealt a blow to econometrics by arguing that if people were rational then their rationality would cause them to figure out predictable patterns from the past and adapt, so that past information would be completely useless for predicting the future (the argument, phrased in a very mathematical form, earned him th

Consider the following question posed by Amartya Sen, winner of the 1998 Nobel Prize in Economics.13 Three men have come to you looking for work. You have only one job to offer; the work cannot be divided among the three of them and they are all equally qualified. One of your goals is to make the world a better place by hiring the man who needs the

For example, economist George Steckel and anthropologist Jerome Rose (2002) examined health indicators for Prehispanic New World societies and found that the median health of individuals declined as societies grew more complex. This suggests social complexity emerges from mechanisms that promote coordinated behavior even if it is not in the best in

The bottom line is that small changes in the communication structure can affect decisions.

In today’s stock market, most trades are made with someone else’s money (in Druckenmiller’s case, mostly George Soros’s). The 1990s and 2000s are sometimes thought of as the age of the day trader. But holdings by institutional investors like mutual funds, hedge funds, and pensions have increased at a much faster rate (figure 11-9). When Fama drafte