Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Markets are efficient if and only if P = NP (2010)

arxiv.org

Post reply on HN
Print view View original

141–150 of 201 posts

Re: Markets are efficient if and only if P = NP (2010)

#141

Post by js8 »

psergeant wrote: post #129
js8 wrote: post #117

Earlier quoted context omitted.

I gave a citation. When I say "everybody with a bit of economic common sense", I mean everybody in economic profession who is able of some elementary reflection on what they are doing. Even most neoclassicals (which is probably the only school where somebody actually believes in EMH) know that many of the theoretical assumptions are bullshit. Another classic example, aside from EMH, is SMD theorem. I am pretty sure t…

You gave a link to a popsci book whose Wikipedia Criticism section is ... unforgiving and relentless. You then double down on your True Scotsman fallacy, mae a sweeping unsupported claim about a nebulous group of people, and follow it up with another conjecture about another group in an attempt to appeal to authority. We can do better than this.

So do better! Find me an economist who truly believes in EMH and is either not a neoclassical (that's about half of all economists) or makes some real-world economic decisions (like in a central bank) or has expressed his belief in support of EMH after 2008 crash.

I gave you two Nobel prize recipients who actually wrote famous articles explicitly outlining market inefficiencies.

Regarding Steve Keen, I don't have my copy handy, but I am sure it has plenty of additional citations. While it is written in accessible style, it is certainly not unsupported. (I personally think that every student of economics should read him, but it's up to each individual what they want to do with their free time.) Many post-keynesians I have read expressed similar dismay about EMH.

Re: Markets are efficient if and only if P = NP (2010)

#142

Post by zeth___ »

csomar wrote: post #110
zeth___ wrote: post #79

Earlier quoted context omitted.

You get silenced by karma when you have unpopular opinions. You know, just how people used to tell homosexuals to not be gay when other people thought they were freaks because of it.

What I’m saying is stop worrying about karma and talk your opinions. Karma is not money or air. Your opinion matters.

And what I'm saying is that you literally can't when you get enough negative karma. I have three HN accounts and two of them have negative karma and can't post without mod approval.

Or it just says: You're posting too fast. Please slow down. Thanks.

Re: Markets are efficient if and only if P = NP (2010)

#144

Post by heavenlyblue »

js8 wrote: post #61

Frankly, everybody with a bit of economic common sense knows that efficient market hypothesis (EMH) is just a weird theoretical nonsense which is nowhere close to describing real world. If you want a full critique, read Steve Keen's Debunking Economics, it has a chapter on EMH. Oh and by the way, there is quite a bit of people who believe that P=NP. Most famously Donald Knuth. I recently became convinced about that a…

EMH is supported by the existence of Index Funds. So the truth of EMH depends on any point in time where the answer to the question of "Do Index Funds on average earn more than Private Funds?" is yes.

It's not even binary and is not a static property, just like our laws are just a proxy to a question of what is ethical or moral; and the truth of their purpose is entirely based on the historical context.

Re: Markets are efficient if and only if P = NP (2010)

#145

Post by evrydayhustling »

ianai wrote: post #60
SolarNet wrote: post #20

Earlier quoted context omitted.

On two, as this appears to be a cross disciplinary paper, it's important to consider that some economists currently claim markets are efficient (the efficient market hypothesis, which is like a big open question in economics). By drawing a link between the EMH and P=NP (which many computer scientists believe is unlikely) the author is linking two open questions with opposing beliefs. So I think point two is sort of a…

I don’t think economists claim markets are efficient. There’s far too many examples to the contrary - see amazon, wellsfargo, and Verizon as examples. While those companies do technically have competition, they operate with significant market power. Also, I once heard an Econ explain EH as “true if enough people operate under the assumption that it is not true” Edit-After waking up a little more, I’m not entirely sur…

This. Economists and decision theorists like Herb Simon have been actively modeling "bounded rationality" since the 70s, but well before that, literal interpretations of efficient market theory were limited to those with something to sell (mainly to regulators). There are limits to human (and corpory) rationality that kick in way before P?=NP.

Re: Markets are efficient if and only if P = NP (2010)

#146

Post by lynal »

Based on a quick skim, this is not a good paper. Computer scientists writing on economics is great, it's helpful to grow new ideas in the field. Unfortunately they sometimes use economic concepts imprecisely at detriment to their question, methodology, and results.

That's the case here. This paper posits a definition of efficiency, but does not explain why that definition is correct or how it relates to other efficiency measures.

A better proof of arbitrage opportunities in markets is Wah 2016, which identifies actual arbitrage opportunities in actual markets.

Separately, what does "Since P probably does not equal NP" mean as a probabilistic statement?

And what is the correct way to concisely and precisely write: "most people familiar with the P = NP problem believe with varying degrees of confidence that P is not equal to NP, but so far no proof exists."

Re: Markets are efficient if and only if P = NP (2010)

#147

Post by argv_empty »

jonathanstrange wrote: post #70
soVeryTired wrote: post #58

Meh. Whatever your opinions on P = NP, the efficient markets hypothesis is unfalsifiable. You can only falsify a joint hypothesis of efficiency plus some model of information flow into a market.

Wait a minute, if the paper correctly links a theoretical definition of efficiency to the complexity class and indeed shows that markets can be efficient only iff. P=NP, then any future proof that P!=NP falsifies the thesis that markets are efficient. And most experts agree that if we ever get a proof, then it will be a proof of NP!=P. Knuth is a notable exception, although he has to my knowledge never really vigorou…

The paper doesn't even manage to prove that finding a significantly profitable technical strategy is in NP.

Re: Markets are efficient if and only if P = NP (2010)

#148

Post by myWindoonn »

lynal wrote: post #146

Based on a quick skim, this is not a good paper. Computer scientists writing on economics is great, it's helpful to grow new ideas in the field. Unfortunately they sometimes use economic concepts imprecisely at detriment to their question, methodology, and results. That's the case here. This paper posits a definition of efficiency, but does not explain why that definition is correct or how it relates to other efficie…

Whether P and NP are equal is an arithmetic statement; it's either true or not true, but we may not have the proof systems required to demonstrate it.

Your excerpted sentence is already quite concise compared to serious surveys like https://www.scottaaronson.com/papers/pnp.pdf

Re: Markets are efficient if and only if P = NP (2010)

#149

Post by myWindoonn »

babypistol wrote: post #97

I have always been puzzled by why we as computer scientists give such importance to P vs NP. I always thought that even if P = NP the solutions might still be much harder (but only polynomially) to find than to verify. I always get angry when people say that P = NP would mean that problems would be equally as easy to solve as to verify. So, because of that, P v NP always seemed irrelevant to me. But in the article, t…

No. The reason why computation in P is considered tractable is because the exponents in polynomial coefficients in complexity analyses tend to be small. Linear-, quadratic-, and cubic-time algorithms dominate P, and we pride ourselves on finding ways to reduce those exponents. Some problems in P, like matrix multiplication and context-free parsing, have been analyzed to death this way.

We give importance to this question because it is open, it is big, it relates to many other parts of computer science, it has real-world implications, etc. The fact that you don't think this question is important likely means that you don't have the complexity-theoretic background required to appreciate the stark deepness of the question. This isn't bad, but it's myopic.

Re: Markets are efficient if and only if P = NP (2010)

#150

Post by rileyphone »

baursak wrote: post #122
Iv wrote: post #87

Earlier quoted context omitted.

When I tried to read about Allende's cybersyn all I could find are a few retro-futuristic furniture, but no meat whatsoever about the kind of software that was behind. It looked like pure PR to me. Do you have good sources about it? It has always intrigued me. Personally I think it is very unlikely that the markets are close to the best approximation we can afford. The current market-making agents use limited intelli…

I'm interested in this. So far, the best resources I found are: - "Red Plenty" by Francis Spufford, a mix of fiction and non-fiction about planning experience in the USSR. It includes a rich bibliography and references to papers published over the past 70 years around this issue. - There are few papers by Chinese economists, most notably this one: https://boingboing.net/2017/09/14/platform-socialism.html (you have to…

Check out "Towards a New Socialism", by the aforementioned Cockshott and Cotrell. Cockshott himself is a computer scientist and proposes planning the economy based on solving a linear system of labour inputs.
Post reply on HN