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THE DISMAL SCIENCE REMAINS DISMAL

WHEN HRISTOS DOUCOULIAGOS was a young economist in the mid-1990s, he got interested in all the ways economics was wrong about itself—bias, underpowered research, statistical shenanigans. Nobody wanted to hear it. “I’d go to seminars and people would say, ‘You’ll never get this published,’” Doucouliagos, now at Deakin University in Australia, says. “They’d say, ‘this is bordering on libel.’”

Now, though? “The norms have changed,” Doucouliagos says. “People are interested in this, and interested in the science.” He should know—he’s one of the reasons why. In the October issue of the prestigious Economic Journal, a paper he co-authored is the centerpiece among a half-dozen papers on the topic of economics’ own private replication crisis, a variation of the one hitting disciplines from psychology to chemistry to neuroscience.

More here – Wired

MiB: Paul Wilmott on Trouble with Quants


 

Stress hormones in financial traders may trigger ‘risk aversion,’ contribute to market crises

High levels of the stress hormone cortisol may contribute to the risk aversion and ‘irrational pessimism’ found among bankers and fund managers during financial crises, according to a new study. Cortisol is a hormone secreted by the adrenal glands in response to moments of high physical stress, such as ‘fight or flight’. Importantly, cortisol also rises powerfully in situations of uncertainty, such as volatility in the financial markets. Cortisol prepares us for possible action by releasing glucose and free fatty acids into the blood. It also suppresses any bodily functions not needed during a crisis — such as the digestive, reproductive, and immune systems.

More here – Science Daily

A Brief Introduction To Game Theory

Claude Shannon, the Las Vegas Shark

Long before the Apple Watch or the Fitbit, what was arguably the world’s first wearable computer was conceived by Ed Thorp, then a little-known graduate student in physics at the University of California, Los Angeles. Thorp was the rare physicist who felt at home with both Vegas bookies and bookish professors. He loved math, gambling, and the stock market, roughly in that order. The tables and the market he loved for the challenge: Could you create predictability out of seeming randomness? What could give one person an edge in games of chance? Thorp wasn’t content just pondering these questions; like Shannon, he set out to find and build answers.

More here – The Nautilus

Getting Hit In The Head Is Bad For You

I have written about the remarkable John Urschel before and I did make a comment that it would be a shame to see such a remarkable intellect blunted by repetitive injuries.

One of the N.F.L.’s smartest players did the math and decided to retire after just three years in the league.

John Urschel, an offensive lineman for the Baltimore Ravens who received much publicity for his off-season pursuit of a doctorate in math at M.I.T., told the team on Thursday that he was hanging up his cleats at 26.

Urschel’s agent, Jim Ivler, said Urschel was overwhelmed with interview requests but would not be speaking to the news media. On Twitter, Urschel wrote that “there is no big story here” and that the decision to retire was not an easy one to make, but “it was the right one for me.”

He added that he planned to return to school full time in the fall, “to take courses that are only offered in the fall semester” and spend time with his fiancée, who is expecting their first child in December.

Urschel’s decision came two days after the release of a study in which all but one of 111 brains of former N.F.L. players showed signs of chronic traumatic encephalopathy, a degenerative brain disease linked to repeated hits to the head.

More here – New York Times

The Scientific Method & Investment Management


 

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