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49,259
Noise Trader Risk in Financial Markets
, 1989
"... We present a simple overlapping generations model of an asset market in which irrational noise traders with erroneous stochastic beliefs both affect prices and earn higher expected returns. The unpredictability of noise traders ’ beliefs creates a risk in the price of the asset that deters rational ..."
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Cited by 890 (24 self)
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We present a simple overlapping generations model of an asset market in which irrational noise traders with erroneous stochastic beliefs both affect prices and earn higher expected returns. The unpredictability of noise traders ’ beliefs creates a risk in the price of the asset that deters rational
Buffer stock saving and the lifecycle/permanent income hypothesis
 Quarterly Journal of Economics
, 1997
"... This paper argues that the typical household’s saving is better described by a “bufferstock” version than by the traditional version of the Life Cycle/Permanent Income Hypothesis (LC/PIH) model. Bufferstock behavior emerges if consumers with important income uncertainty are sufficiently impatient. ..."
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Cited by 467 (19 self)
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]; the “consumption/income divergence ” first documented in the 1930's; and the temporal stability of the household age/wealth profile despite the unpredictability of idiosyncratic wealth changes.
Fundamental Sources of Unpredictability
 Complexity
, 1996
"... Of course, spontaneous symmetry breaking may give rise to some parameters and even to a choice of solutions, with probabilities for the various alternatives. I shall deal with that possibility further on.) This second assumption is equivalent to stating that there is no necessary fundamental unpre ..."
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Cited by 3 (0 self)
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unpredictability stemming from ignorance of the universal dynamical law. 3) The density matrix (in the Schrsdinger picture) of the universe near the beginning of its expansion is also knowable. It must in any case be comparatively simple and very far from equilibrium. The second law of thermodynamics
COMPLEX AND UNPREDICTABLE CARDANO
, 806
"... Abstract. This purely recreational paper is about one of the most colorful characters of the Italian Renaissance, Girolamo Cardano, and the discovery of two basic ingredients of quantum theory, probability and complex numbers. The paper is dedicated to Giuseppe Castagnoli on the occasion of his 65th ..."
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Cited by 2 (0 self)
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Abstract. This purely recreational paper is about one of the most colorful characters of the Italian Renaissance, Girolamo Cardano, and the discovery of two basic ingredients of quantum theory, probability and complex numbers. The paper is dedicated to Giuseppe Castagnoli on the occasion of his 65th birthday. Back in the early 1990s, Giuseppe instigated a series of meetings at Villa Gualino, in Torino, which brought together few scattered individuals interested in the physics of computation. By doing so he effectively created and consolidated a vibrant and friendly community of researchers devoted to quantum information science. Many thanks for that! 1. Gambling scholar I always found it an interesting coincidence that the two basic ingredients of modern quantum theory, namely probability and complex numbers, were discovered by the same person, an extraordinary man of many talents, a gambling scholar by the name of Girolamo Cardano.
FUNDAMENTAL SOURCES OF UNPREDICTABILITY
"... SFI Working Papers contain accounts of scientific work of the author(s) and do not necessarily represent the views of the Santa Fe Institute. We accept papers intended for publication in peerreviewed journals or proceedings volumes, but not papers that have already appeared in print. Except for pap ..."
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SFI Working Papers contain accounts of scientific work of the author(s) and do not necessarily represent the views of the Santa Fe Institute. We accept papers intended for publication in peerreviewed journals or proceedings volumes, but not papers that have already appeared in print. Except for papers by our external faculty, papers must be based on work done at SFI, inspired by an invited visit to or collaboration at SFI, or funded by an SFI grant. ©NOTICE: This working paper is included by permission of the contributing author(s) as a means to ensure timely distribution of the scholarly and technical work on a noncommercial basis. Copyright and all rights therein are maintained by the author(s). It is understood that all persons copying this information will adhere to the terms and constraints invoked by each author's copyright. These works may be reposted only with the explicit permission of the copyright holder. www.santafe.edu
Sunk Investments Lead to Unpredictable Prices
, 2003
"... We study transactions that require investments before trading in a competitive market, when forward contracts fixing the transaction price are absent. We show that, despite the market being perfectly competitive and subject to arbitrarily little uncertainty, the inability to jointly determine invest ..."
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Cited by 3 (0 self)
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We study transactions that require investments before trading in a competitive market, when forward contracts fixing the transaction price are absent. We show that, despite the market being perfectly competitive and subject to arbitrarily little uncertainty, the inability to jointly determine investment levels and prices may make it impossible for buyers and sellers to predict the prices at which they will trade, leading to inefficient levels of investment and trade. (JEL D40, D50) A couple must decide whether to take a vacation in the Caribbean or to sacrifice the vacation to save money in anticipation of some day buying a house. This is essentially an investment decision for which they need to determine the relevant returns, a problem complicated by the fact that they do not know what housing prices will be when they are ready to buy. In a world of complete markets, the couple
Protean Primates: The Evolution of Adaptive Unpredictability in Competition and Courtship
"... Machiavellian intelligence evolves because it lets primates predict and manipulate each others ’ behavior. But game theory suggests that evolution will not stop there: predictive capacities tend to select for unpredictability in counterstrategies, just as many competitive games favor “mixed ” (stoc ..."
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Machiavellian intelligence evolves because it lets primates predict and manipulate each others ’ behavior. But game theory suggests that evolution will not stop there: predictive capacities tend to select for unpredictability in counterstrategies, just as many competitive games favor “mixed
Generation of unpredictable time series by a Neural Network
 Rev. E
, 2001
"... A perceptron that learns the opposite of its own output is used to generate a time series. We analyse properties of the weight vector and the generated sequence, like cycle length and probability distribution of generated sequences. A remarkable suppression of the autocorrelation function is explain ..."
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Cited by 2 (1 self)
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A perceptron that learns the opposite of its own output is used to generate a time series. We analyse properties of the weight vector and the generated sequence, like cycle length and probability distribution of generated sequences. A remarkable suppression of the autocorrelation function is explained, and connections to the Bernasconi model are discussed. If a continuous transfer function is used, the system displays chaotic and intermittent behaviour, with the product of learning rate and amplication as a control parameter. For every prediction algorithm that maps a binary time series onto a binary output there is a sequence for which it gives 100% wrong predictions [1]. This sequence can be constructed easily by having the algorithm predict the next bit in the time series and continuing the series with the opposite of the prediction. Of course, this sequence will only make one given algorithm with one given set of initial parameters fail completely. However, it is still interestin...
Shifting Environmental Foundations: The Unprecedented and Unpredictable Future
"... Prediction is very difficult, especially about the future. ..."
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Cited by 2 (1 self)
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Prediction is very difficult, especially about the future.
Results 1  10
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