82,964
edits
Tail event: Difference between revisions
no edit summary
Amwelladmin (talk | contribs) No edit summary Tags: Mobile edit Mobile web edit |
Amwelladmin (talk | contribs) No edit summary Tags: Mobile edit Mobile web edit |
||
| Line 11: | Line 11: | ||
Except, as [[David Viniar]]’s immortal words remind us, the events these numbers represent — the territory for which they are a map — are wont to have other ideas. | Except, as [[David Viniar]]’s immortal words remind us, the events these numbers represent — the territory for which they are a map — are wont to have other ideas. | ||
There is a great difference between a rolling die and a stock market. A rolling die is a “[[nomological machine]]”: a carefully constrained, sealed environment designed specifically to yield the theoretical outcome. The map is, as far as engineering permits, materially identical to the territory. We can, indeed, generate an indistinguishable outcome purely by running the model with a random number generator. The machined dice, the flat, constrained surface — these are a representation of the reality, which is the hypothetical model, and not the other way around. A loaded die is a flawed machine. You don't chuck out the theory: you chuck out the equipment. | There is a great difference between a rolling die and a stock market. A rolling die is a “[[nomological machine]]”: a carefully constrained, sealed environment designed specifically to yield the theoretical outcome. The map is, as far as engineering permits, materially identical to the territory. We can, indeed, generate an indistinguishable outcome purely by running the model with a random number generator. The machined dice, the flat, constrained surface — these are a representation of the reality, which is the hypothetical model, and not the other way around. A loaded die is a ''flawed'' machine. You don't chuck out the theory: you chuck out the equipment. | ||
In any case these are the circumstances in which the rules of probability prevail. Should the universe misbehave | Likewise, if, inside your nomological machine there is a mischievous imp who catches and places the die as it sees fit, the conditions for your probabilistic calculation do not prevail. There is an interfering casual agent. | ||
Nomological machines are highly constrained, artificial, environments. If all their conditions are not satisfied, we can expect the world to behave differently without validating the machine. This is how, as Nancy Cartwright put it the laws of physics lie. | |||
In any case these are the circumstances in which the rules of probability prevail. Should the universe misbehave | |||
====Derivatives trading==== | ====Derivatives trading==== | ||