Economics, Ergodicity, Excel, and Fat Tails | Complex, but Interesting
Come learn with us:
Jedi Techniques (about conserving mental fuel): https://sprint.mnogosdelal.ru/
Hoolilogic (about working with thinking): https://logic.mnogosdelal.ru/
How to 'unread' books and work with incoming information: https://books.mnogosdelal.ru/
Links to referenced resources:
Ole Peters's talk: • Time for a Change: Introducing irreversibl...
Article on ergodic economics: / 300-%d0%bb%d0%b5%d1%82-%d0%b2-%d0%b8%d1%81...
Links to my books:
Jedi Techniques: https://links.mnogosdelal.ru/book
The Jedi Path: https://links.mnogosdelal.ru/JediWay
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Today I have a rather complex topic: Ergodicity.
In "Path of the Jedi," there's a separate section devoted to ergodicity, but there I use the concept only to demonstrate the limited usefulness of experimental psychology research for personal performance optimization. However, the overall story is far more interesting...
Here, using Excel and simple formulas, I want to demonstrate the core idea underlying ergodic economic theory.
If we consider that the time average and the ensemble average are quantities of different nature and stop confusing them, then many mysteries in economics, sociology, and psychology become easily explained.
In particular, psychology is known for a large number of experiments demonstrating the supposed "illogicality" of human behavior: people are given a choice and shown to typically make choices that are inconsistent with the optimal choice from the perspective of classical economic theory (based on the calculation of mathematical expectation). But the mathematical expectation is the ensemble average, and people are interested in the time average...
Along the way, this turned out to be a master class in simulating random processes in Excel.
In short, I hope this series won't intimidate you with its complexity and will also be interesting.
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Hello everyone!
My name is Maxim Dorofeev. I studied physics at Moscow State University and later worked in management positions at a number of IT companies of varying renown. Even then, I began to suspect that the key to the successful work of a team as a whole and each of its members in particular lies somewhere deep within our heads. For the past 15 years, I've been studying psychology, medicine, philosophy, and management from various angles... I've pored over a ton of literature (of varying degrees of usefulness) on the topic of self-development, personal growth, motivation, and all that jazz, all in the pursuit of the answer to the question: "What can make us more successful and happier?"
To date, I've published my main findings in two books and continue to seek and share all sorts of interesting things about how we are structured.