121–130 of 176 posts
Earlier quoted context omitted.
assuming the typical "spherical market in a vacuum where the agents are maximally rational non-biological utility maximizers"
Well, for better or worse, markets are becoming increasingly dominated by "non-biological utility maximizers" - mostly hft bots, but now also llm-based reasoning agents.
Earlier quoted context omitted.
The fact that free markets don't exist, and that supply and demand is not a natural law that implies efficient markets has never stopped people acting like both are true and stuffing fingers in their ears. But, both free markets and supply/demand are useful enough concepts to talk loosely about processes to understand the interest that I'll enjoy digging into this.
They're not just useful concepts tho, they're how every business operates, and the concepts cover the vast majority of situations. The behavioral economics/Freakonomics thing was like "Hey, here's this thing that might if you squint real hard fall outside of efficient market theory" and then for a decade people took that to mean that that the base concepts were worthless , which was a severe overcorrection from peopl…
Earlier quoted context omitted.
UTF8 to the rescue: ≠
Fun fact, pascal uses for inequality
BASIC[1] came out in 1964, and Pascal[2] came out in 1970.
---
[1] https://en.wikipedia.org/wiki/Dartmouth_BASIC
[2] https://en.wikipedia.org/wiki/Pascal_(programming_language)
Wow... this is quite fascinating. It has been theorized for a little while that widespread AI could form accidental trusts due to optimization around one-another. This seems to be taking it a step further and arguing that if P!=NP, then markets are certain to trend towards collusive.
Earlier quoted context omitted.
Why? Don't you prefer getting better prices when you want to go buy a stock?
The argument is not that you get better prices, it’s that you get accurate prices. First, this definition has always been circular: what’s the most accurate price? The one the market comes up with. More market, more accuracy! Second, there is never any reconciliation of the costs society is saddled with in order to chase arbitrarily more accurate prices, the most obvious of which is the massive quantity of fat skimme…
Market makers and HFT don't determine price: price is usually purely determined by the net inflows and outflows as decided by humans. MMs just smooth it out over time so everyone gets good pricing at the time and in the size they want it.
> Second, there is never any reconciliation of the costs society is saddled with in order to chase arbitrarily more accurate prices
By definition market makers are earning a fraction of the price improvement they provide, ergo the costs to society have to be less that the benefits for better pricing for the companies to stay in business!
> Third, as an index investor, I more or less couldn’t care less
As an index investor you should absolutely care! How do you think you are able to buy into the fund at a reasonable price? And then how do you think the fund is able to rebalance without transaction costs destroying performance long-term?
Earlier quoted context omitted.
Well, for better or worse, markets are becoming increasingly dominated by "non-biological utility maximizers" - mostly hft bots, but now also llm-based reasoning agents.
They're not necessarily maximising utility, just the number on the screen.
Earlier quoted context omitted.
The paper seems to be based on an invalid assumption. From the abstract: > If P != NP, the collusion detection problem is computationally infeasible for markets satisfying a natural instance-hardness condition on their demand structure, rendering punishment threats non-credible and collusion unstable. ...and then from the paper: > Stigler (1964) famously argued that the “chief difficulty” of collusion is detecting “s…
Why can’t my firm react if we find out we’re being undercut by a competitor? Or are you saying that we “know” only in a theoretical, “we can’t prove we’re not being undercut” sort of way, but without “proof” we can’t take action?
Examples of the former: cutting prices yourself; increasing product quality; differentiating yourself; spending more on advertising to get the word out about your product.
Examples of the latter: crafting exclusive deals with your distributors to prevent your competitors from getting shelf space; politically influencing regulatory bodies to declare your competitors' existence illegal; making direct agreements with the leadership of opposing firms to not drop prices or hike wages; assassinating, extorting, or kidnapping rival business leaders.
Basically it comes down to "control yourself, because you cannot control others". In a functioning market, you have no control over what rival firms offer. Your only legal reaction to competition is to improve your own offering until it is the best it can be. In pathological markets where the assumption is (as in the paper) that you can punish rivals for not colluding, you actively make your competitor's offering worse.
Those pathological markets exist today, but if you're analyzing markets economically, your root assumption should not be that pathology is normal and only the lack of information keeps it in check, it should be that information is abundant and it is the lack of ability that keeps it in check.
Earlier quoted context omitted.
That seems to stretch the meaning of market inefficiency. Is the lack of unlimited free energy an inefficiency in a market? Because an entrepreneur who achieves that is going to do pretty well. I’d say that would be creating value not optimizing market efficiency.
How would creating unlimited free energy allow an entrepreneur to do pretty well? It it's free, there's no money to be made.
Earlier quoted context omitted.
They're not just useful concepts tho, they're how every business operates, and the concepts cover the vast majority of situations. The behavioral economics/Freakonomics thing was like "Hey, here's this thing that might if you squint real hard fall outside of efficient market theory" and then for a decade people took that to mean that that the base concepts were worthless , which was a severe overcorrection from peopl…
Economics is one of the scientific sore spots for liberal ideology. If you are liberal and mostly swim in liberal circles, you probably believe that economics is mostly bunk pseudoscience. Akin to conservatives and climate change
Nothing to do with ideology, but with the nature of the field. Take epidemiological research in the areas of food and medicine: incredibly hard and expensive to get right and even then with often tenuous results. Now try doing that with ridiculously heterogeneous nations influenced by potentially almost everything on the planet.
It's a small miracle that economists manage to get some useful insights out of the data, but we should definitely be aware of how weakly most of them are supported (don't start talking about "error bars" with economists).
Earlier quoted context omitted.
The actual paper’s title is “Markets are competitive if and only if P ≠ NP” It’s 2026, people, you don't have to use crude ASCII approximations of mathematical symbols any more.
Unless and until desktop OSes make typing symbols not on the keyboard as easy as iOS or Android, I can't be bothered.
For whatever reason, the OS documentation lacks a list of allowed compose key sequences. But they are intuitive enough that you can find many of them through experimentation. For example:
Musical sharp ("♯"): compose + "#" + "#".
Interrobang ("‽"): compose + "!" + "?".
Letter "ñ" as in "jalapeño": compose + "n" + "~".
Copyright ("ⓒ"): compose + "(" + c + ")".