Sublime

Noah Williams develops a simple model where adaptive learning by investors leads to recurrent booms and busts in asset prices. The model captures aspects of Minsky’s “financial instability hypothesis” in which periods of tranquility lead investors to increase their estimates of expected returns and reduce their estimates of return volatility. The c

Stereotypically, the startup world is supposed to consist of heroes producing an excess return by pursuing ideas that nobody else believes in. In reality, the multi-stage nature of venture capital makes it very easy for the field to end up pinned to traditions about whether entrepreneurs ought to have red hair—not because everyone believes it, but

Sometimes the invisible handwave is combined with the incentives argument to suggest that when the stakes are high and the choices are difficult, people will go out and hire experts to help them. The problem with this argument is that it can be hard to find a true expert who does not have a conflict of interest. It is illogical to think that someon

The importance of thinking on the margin did not become commonplace in economics until 1871, when marginal thinking was simultaneously described by three economists: William Stanley Jevons, Carl Menger, and Leon Walras. Economists refer to the “marginal revolution” to explain this transformation in economic thought.

Economists describe the Tragedy of the Commons like this: cattle herders sharing a pasture will inevitably place the needs of their cows above the needs of others’, adding cow after cow and taking more than their share of the common grass. The “free rider” takes advantage of the commons, and consumes it until it’s gone. This, the argument goes, is

So Dunbar proposed a novel idea: the size of a species’ brain determines the optimal size of their social groups. Maintaining relationships, argued Dunbar, requires brain power. More relationships require more neurons. Extrapolating his straight line from primate brains to human brains, he found that the optimal human group size, if this hypothesis

Gaal Dornick, using nonmathematical concepts, has defined psychohistory to be that branch of mathematics which deals with the reactions of human conglomerates to fixed social and economic stimuli.…