[NKS=Mirowski?] - A New Kind of Science: The NKS ForumA New Kind of Science: The NKS Forum
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NKS=Mirowski?
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Posted by: Javier Finkman
A confession: I have not read NKS book. I just scanned a few pages, read a few comments, etc. No excuses (except maybe a very weak domestic currency). Still, I got some ideas about it I hope. It looks very similar to Mirowski's proposal in his new book "Machine Dreams" (that I had to review). The idea of automatas leading to organization, the importance of interactions over cognitive issues, etc., etc. Has anyone read BOTH books and have the same impression?
Posted by: Fiona Maclachlan
Not having yet read Mirowski's book but being broadly familiar with the ideas in it, I can offer a partial answer.
Mirowski, along with others in the field of computational economics, is optimistic about the promise of CA for modeling markets. He cites John von Neumann's work from the 1960's as the starting point. My general impression of the field is that there's been a great deal of talk of its promise, but not much in the way of actual evidence in the form of worked out models.
Wolfram presents a model of a financial market (429-432 in the NKS book) which shows that even if traders follow a very simple rule the resulting time series of prices will appear random. It contributes to our understanding of what determines the randomness in financial asset prices, showing that it can be intrinsically generated.
It is a rather modest result in comparison with the other major discoveries in the NKS book--and in comparison to the kind of things that the computational economists envision will eventually be achieved with CA.
In the notes, Wolfram writes a bit about the history of computational economics (1015R) and his experiences trying to work out models himself:
By the mid-1980s, however, it began to be clear that the whole game-theoretical idea of thinking of markets as collections of rational entities that optimize their positions on the basis of complete information was quite inadequate. Some attempts were made to extend traditional mathematical models, and various highly theoretical analyses were done based on treating entities in the market as universal computers. But by the end of the 1980s, the idea had emerged of doing explicit computer simulations with entities in the market represented by practical programs. (See also page 1109.) Often these programs used fairly sophisticated algorithms intended to mimic human traders, but in competitions between programs simpler algorithms have never seemed to be at much of a disadvantage. The model in the main text is in a sense an ultimate idealization along these lines. It follows a sequence of efforts that I have made since the mid-1980s - though have never considered very satisfactory - to find minimal but accurate models of financial processes.
You might also want to look at the following notes:
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