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Dumb Agent Theory
The dumb agent theory (DAT) states that many people making individual buying and selling decisions will better reflect true value than any one individual can. In finance this theory is predicated on the efficient-market hypothesis (EMH). One of the first instances of the dumb agent theory in action was with the Policy Analysis Market (PAM); a futures exchange developed by DARPA. While this project was quickly abandoned by the Pentagon, its idea is now implemented in futures exchanges and prediction markets such as Intrade, Newsfutures and Predictify. The DAT is technically a hypothesis, not a theory. While first mentioned strictly by name in relation to PAM in 2003, the dumb agent theory was originally conceived (as the Dumb Smart Market) by James Surowiecki in 1999. Here, Surowiecki differentiated from the EMH stating that it "doesn't mean that markets are always right." Instead, he argues that markets are subject to manias and panics because "people are always shouting out" their ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Efficient-market Hypothesis
The efficient-market hypothesis (EMH) is a hypothesis in financial economics that states that asset prices reflect all available information. A direct implication is that it is impossible to "beat the market" consistently on a risk-adjusted basis since market prices should only react to new information. Because the EMH is formulated in terms of risk adjustment, it only makes testable predictions when coupled with a particular model of risk. As a result, research in financial economics since at least the 1990s has focused on market anomalies, that is, deviations from specific models of risk. The idea that financial market returns are difficult to predict goes back to Bachelier, Mandelbrot, and Samuelson, but is closely associated with Eugene Fama, in part due to his influential 1970 review of the theoretical and empirical research. The EMH provides the basic logic for modern risk-based theories of asset prices, and frameworks such as consumption-based asset pricing and int ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
James Surowiecki
James Michael Surowiecki ( ; born April 30, 1967) is an American journalist. He was a staff writer at ''The New Yorker'', where he wrote a regular column on business and finance called "The Financial Page". Background Surowiecki was born in Meriden, Connecticut, and spent several childhood years in Mayagüez, Puerto Rico, where he received a junior high-school education from Southwestern Educational Society (SESO). He is a 1984 graduate of Choate Rosemary Hall and a 1988 alumnus of the University of North Carolina at Chapel Hill, where he was a Morehead Scholar. Surowiecki pursued PhD studies in American history on a Mellon Fellowship at Yale University from 1988 to 1995, but did not complete his studies and did not receive a doctoral degree. In 1995, he founded the now-defunct e-magazine ''Rogue'' and began a career in journalism. He lives in New Haven, Connecticut, and is married to ''Slate'' culture editor Meghan O'Rourke. Career Surowiecki's writing has appeared in a wi ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Bayesian Search Theory
Bayesian search theory is the application of Bayesian statistics to the search for lost objects. It has been used several times to find lost sea vessels, for example USS Scorpion (SSN-589), USS ''Scorpion'', and has played a key role in the recovery of the flight recorders in the Air France Flight 447 disaster of 2009. It has also been used in the attempts to locate the remains of Malaysia Airlines Flight 370. Procedure The usual procedure is as follows: # Formulate as many reasonable hypotheses as possible about what may have happened to the object. # For each hypothesis, construct a probability density function for the location of the object. # Construct a function giving the probability of actually finding an object in location X when searching there if it really is in location X. In an ocean search, this is usually a function of water depth — in shallow water chances of finding an object are good if the search is in the right place. In deep water chances are reduced. ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
United States Navy
The United States Navy (USN) is the maritime service branch of the United States Armed Forces and one of the eight uniformed services of the United States. It is the largest and most powerful navy in the world, with the estimated tonnage of its active battle fleet alone exceeding the next 13 navies combined, including 11 allies or partner nations of the United States as of 2015. It has the highest combined battle fleet tonnage (4,635,628 tonnes as of 2019) and the world's largest aircraft carrier fleet, with eleven in service, two new carriers under construction, and five other carriers planned. With 336,978 personnel on active duty and 101,583 in the Ready Reserve, the United States Navy is the third largest of the United States military service branches in terms of personnel. It has 290 deployable combat vessels and more than 2,623 operational aircraft . The United States Navy traces its origins to the Continental Navy, which was established during the American Revo ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
USS Scorpion (SSN-589)
USS ''Scorpion'' (SSN-589) was a ''Skipjack''-class nuclear-powered submarine that served in the United States Navy, and the sixth vessel, and second submarine, of the U.S. Navy to carry that name. ''Scorpion'' was lost with all hands on 22 May 1968. She is one of two nuclear submarines the U.S. Navy has lost, the other being . She was one of the four mysterious submarine disappearances in 1968, the others being the Israeli submarine , the , and the . The wreckage of the ship remains in the North Atlantic Ocean with all its armaments and nuclear reactor. Service ''Scorpion''s keel was laid down 20 August 1958 by General Dynamics Electric Boat in Groton, Connecticut. She was launched 19 December 1959, sponsored by Elizabeth S. Morrison, the daughter of the last commander of the World War II-era , Lt. Cdr. Maximilian Gmelich Schmidt (that ship was also lost with all hands, in 1944). ''Scorpion'' was commissioned 29 July 1960, with Commander Norman B. Bessac in command. ( ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Abilene Paradox
In the Abilene paradox, a group of people collectively decide on a course of action that is counter to the preferences of many or all of the individuals in the group. It involves a common breakdown of group communication in which each member mistakenly believes that their own preferences are counter to the group's and, therefore, does not raise objections, or even states support for an outcome they do not want. A common phrase relating to the Abilene paradox is a desire to not "rock the boat". This differs from groupthink in that the Abilene paradox is characterized by an inability to manage agreement. Explanation The term was introduced by management expert Jerry B. Harvey in his 1974 article "The Abilene Paradox: The Management of Agreement". The name of the phenomenon comes from an anecdote that Harvey uses in the article to elucidate the paradox: The Abilene paradox is similar to groupthink; however, groupthink individuals are not acting contrary to their conscious wishes an ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Bandwagon Effect
The bandwagon effect is the tendency for people to adopt certain behaviors, styles, or attitudes simply because others are doing so. More specifically, it is a cognitive bias by which public opinion or behaviours can alter due to particular actions and beliefs rallying amongst the public. It is a psychological phenomenon whereby the rate of uptake of beliefs, ideas, fads and trends increases with respect to the proportion of others who have already done so. As more people come to believe in something, others also "hop on the bandwagon" regardless of the underlying evidence. Following others' actions or beliefs can occur because of conformism or deriving information from others. Much of the influence of the bandwagon effect comes from the desire to 'fit in' with peers; by making similar selections as other people, this is seen as a way to gain access to a particular social group. An example of this is fashion trends wherein the increasing popularity of a certain garment or style ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Groupthink
Groupthink is a psychological phenomenon that occurs within a group of people in which the desire for harmony or conformity in the group results in an irrational or dysfunctional decision-making outcome. Cohesiveness, or the desire for cohesiveness, in a group may produce a tendency among its members to agree at all costs. This causes the group to minimize conflict and reach a consensus decision without critical evaluation. Groupthink is a construct of social psychology, but has an extensive reach and influences literature in the fields of communication studies, political science, management, and organizational theory, as well as important aspects of deviant religious cult behaviour. Overview Groupthink is sometimes stated to occur (more broadly) within natural groups within the community, for example to explain the lifelong different mindsets of those with differing political views (such as "conservatism" and "liberalism" in the U.S. political context or the purported benefits ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Theory
A theory is a rational type of abstract thinking about a phenomenon, or the results of such thinking. The process of contemplative and rational thinking is often associated with such processes as observational study or research. Theories may be scientific, belong to a non-scientific discipline, or no discipline at all. Depending on the context, a theory's assertions might, for example, include generalized explanations of how nature works. The word has its roots in ancient Greek, but in modern use it has taken on several related meanings. In modern science, the term "theory" refers to scientific theories, a well-confirmed type of explanation of nature, made in a way consistent with the scientific method, and fulfilling the criteria required by modern science. Such theories are described in such a way that scientific tests should be able to provide empirical support for it, or empirical contradiction ("falsify") of it. Scientific theories are the most reliable, rigorous, and compr ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Policy Analysis Market
The Policy Analysis Market (PAM), part of the FutureMAP project, was a proposed futures exchange developed, beginning in May 2001, by the Information Awareness Office (IAO) of the United States Defense Advanced Research Projects Agency (DARPA), and based on an idea first proposed by Net Exchange, a San Diego, California, research firm specializing in the development of online prediction markets. PAM was shut down in August 2003 after multiple US senators condemned it as an assassination and terrorism market, a characterization criticized in turn by futures-exchange expert Robin Hanson of George Mason University, and several journalists. Since PAM's closure, several private-sector variations on the idea have been launched. Proposal PAM was to be "a market in the future of the Middle East", and would have allowed trading of futures contracts based on possible political developments in several Middle Eastern countries. The theory behind such a market is that the monetary value o ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Hypothesis
A hypothesis (plural hypotheses) is a proposed explanation for a phenomenon. For a hypothesis to be a scientific hypothesis, the scientific method requires that one can test it. Scientists generally base scientific hypotheses on previous observations that cannot satisfactorily be explained with the available scientific theories. Even though the words "hypothesis" and "theory" are often used interchangeably, a scientific hypothesis is not the same as a scientific theory. A working hypothesis is a provisionally accepted hypothesis proposed for further research in a process beginning with an educated guess or thought. A different meaning of the term ''hypothesis'' is used in formal logic, to denote the antecedent of a proposition; thus in the proposition "If ''P'', then ''Q''", ''P'' denotes the hypothesis (or antecedent); ''Q'' can be called a consequent. ''P'' is the assumption in a (possibly counterfactual) ''What If'' question. The adjective ''hypothetical'', meaning "hav ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Newsfutures
Prediction markets company NewsFutures (2000-2010) has evolved into Lumenogic, "a consulting firm that specializes in developing and customizing online systems for large organizations to use to gather so-called Collective Intelligence from their employees."Stier, K. (2011) Lumenogic Mines Workers’ Opinions for U.S. Air Force, Multinationals. August 30, 2011 '''' Founded in May 2000 by Émile Servan-Schreiber and M ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
