Time, Space, and Climate Damages
Does the way we look at a problem – over time or across an ensemble – change what we see? The main insight from Ergodicity Economics is that when ergodicity […]
Expected-utility maximizers don’t maximize utility.
Ergodicity economics is an umbrella term for addressing issues in economics research by carefully considering the ergodicity problem — that’s the problem that the expected value of something may be
The Brussels Experiment
Readers of this blog will probably be familiar with the Copenhagen experiment. We conducted a similar but much simpler experiment, and we did it in Brussels, so we’re now calling
Ergodicity economics — a history
If you’re wondering where ergodicity economics comes from, where it sits in the world of science, then this blog post if for you. I won’t go into detail about any
An ergodicity perspective on reinforcement learning
“Reinforcement learning, a powerful branch of artificial intelligence (AI), has revolutionized the way machines learn and make decisions. From training autonomous robots to mastering complex games, reinforcement learning holds the
For to withhold is to perish
A central puzzle in evolutionary biology is that of spontaneous altruism. When two creatures interact, why might one sacrifice something of value in order to help the other? Why, if
Insurance as an ergodicity problem
The business of insurance, by various measures, is the largest industry on earth. Somewhat surprisingly, mainstream economics struggles to explain its existence. This post is about how ergodicity economics approaches
The infamous coin toss
In 2011 I gave a 15-minute talk to a lay audience in London. The topic I had chosen was ergodicity breaking, and the challenge was clear: how do you get
Probability weighting and Ergodicity Economics
One key observation that helped launch the field of behavioral economics into stardom is called probability weighting: a human cognitive bias to assign higher probabilities to extreme events than …
Democratic domestic product
Over the years, some words have established themselves at the London Mathematical Laboratory as a useful vocabulary. “Laplacing something” and “Weltschmerz” (p.32) are among these words. Another is “Democratic Domestic
Ergodicity, jail, and time scales
When statistical things go wrong, it’s often because someone unknowingly assumed ergodicity where that wasn’t ok. This can have dramatic effects in everyday language: I will use the example of
What’s a growth rate, really?
Growth rates are at the heart of ergodicity economics, and economic news are full of them, too — “GDP grew by 3% last year,” something like that. Sometimes we also
The Copenhagen experiment
A few weeks ago I was made aware of an experiment that was recently carried out in Copenhagen, by a group of neuroscientists led by Oliver Hulme at the Danish
Economics 101: Bertrand Russell is the Pope
If we assume that a false proposition is true, we can prove anything (ex falso quodlibet). Bertrand Russell, so the story goes, once mentioned this in class. A student raised
The trouble with Bernoulli 1738
Not all academic fields have a clear starting point, a seminal paper that constitutes the foundation of the entire discipline. But economics does. The paper that defines modern formal economics
Max Planck’s scheinproblems
In June 1946 Max Planck spoke in the Göttingen physics colloquium. Planck was 88 years old, had received the highest honors of his community, including a Nobel Prize in 1918
Wealth: redistribution and interest rates
The most interesting scientific projects are those that surprise, when the mathematics, or the code, tells us something we didn’t expect. In our study of US wealth dynamics that’s what
Doing a Laplace
This is a bit of LML jargon that we felt is worth promoting, even though it’s terribly unfair to a great mathematician. So please, you admirers of Laplace, don’t take