Friday, March 28, 2014

Mark Buchanan — Why high alcohol consumption is optimal for humans


Before you pop a cork, this post is about unrealistic assumptions.

An underlying point is that mathematical models are hypothetical-deductive systems that simply articulate what is assumed (postulated). A model cannot deliver on more than initially incorporated. If significant conditions are not included, then it's garbage in, garbage out.

A model is just a way of telling a story. It can be simple or complex but it is a narrative usually offered as an explanation. The formalism adds nothing but logical necessity deriving from formation and transformation rules. 

If the symbolism of the model is not shared topologically with what the model purports to represent, then the model is not realistic no matter how descriptive it looks or how interesting and convincing the story is.

The Physics of Finance

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