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“Dead Cat Bounce” (an elucidation)

Thursday, September 28th, 2017

If you’re not sure what the phrase “Dead Cat Bounce” might mean, then the online pages of the journal Medical Economics are at hand for assistance. The publication informs, with regard to Dead Cat Bounce :

That term refers to a stock that’s had a rapid, steep decline, followed by a brief rally. Like a dead cat dropped from the roof of a building, it may bounce up a little, but that doesn’t mean it has another life left.”

Also noted are : “Bottom fisher.” “Pump and dump” and “Cats and dogs”

See: The “dead cat bounce” and other financial jargon

How money circulates [a new economics insight, using a bicycle in Britain]

Monday, June 26th, 2017

John Stevenson, writing on the road.cc web site, explains how money circulates:

“Stuck in the middle of nowhere with a gert big gash in a lightweight tyre? The Bank of England Five Pound Note is an excellent, robust tyre boot that will get you home, and then you can pop out and spend it on well-deserved cake….”

“When the bank of England put its new fiver into circulation on 13 September last year, one of the proudly touted advantages of the new plastic note was that it was stronger and more durable than the previous paper version. The Bank said: ‘Each new polymer note is expected to last at least 2.5 times longer than the current paper notes. This is because polymer is stronger than paper so the notes can better withstand being repeatedly folded into wallets or scrunched up into pockets.’ … “

A Financial Times-ly look at the prizes

Wednesday, October 12th, 2016

Tim Harford wrote a lovely essay in the Financial Times, about the Ig Nobel Prizes. Here’s a chunk of it:

The Ig Nobel prizes: in praise of ridiculous research

…one of the Ig Nobel’s charms is that this ridiculous research might actually tell us something about the world. David Dunning and Justin Kruger received an Ig Nobel prize in psychology for their discovery that incompetent people rarely realise they are incompetent; the Dunning-Kruger effect is now widely cited. Dorian Raymer and Douglas Smith won an Ig Nobel in physics for their discovery that hair and string have a tendency to become tangled — potentially an important line of research in understanding the structure of DNA. Most famously, Andre Geim’s Ig Nobel in physics for levitating a live frog was promptly followed by a proper Nobel Prize in the same subject for the discovery of graphene.

mitchblunt-ft-drawing

A whimsical curiosity about the world is something to be encouraged. No wonder that the credo of the Ig Nobel prizes is that they should make you laugh, then make you think. In 2001, the Ig Nobel committee did just that, awarding the economics prize to Joel Slemrod and Wojciech Kopczuk, who demonstrated that people will try to postpone their own deaths to avoid inheritance tax. This highlights an important point about the power of incentives — and the pattern has since been discovered elsewhere.

Alas, most economics Ig Nobel prizes provoke little more than harsh laughter. They’ve been awarded to Nick Leeson and Barings Bank, Iceland’s Kaupthing Bank, AIG, Lehman Brothers, and so on. The first economics prize was awarded to Michael Milken, one of the inventors of the junk bond. He was in prison at the time.

Fair game. Still, surely there is something in economics that is ludicrous on the surface yet thought-provoking underneath? (The entire discipline, you say? Very droll.)…

Gold-digging ants – an(other) explanation

Monday, July 11th, 2016

“In northern India there is a sandy desert and in this desert there live large ants, smaller than dogs but larger than foxes. A few ants that have been caught there may be seen at the king of Persia’s place. When digging their holes these ants throw out soil just like the ants in Greece to which they are similar in appearance. The sand thus thrown out contains gold and to gather this sand the Indians go into the desert.”

AntsNGold

So wrote Herodotus somewhere around the middle of the 5th century BC. But, although there are more than 150 references to the creatures in medieval texts, not everyone is convinced – and there are no scientific records of ants that big. Perhaps their size was exaggerated? Maybe they were mistaken for some other animal? Another explanation is provide by medieval researcher Thomas Reimer [whom Improbable cannot as yet locate] who suggests that :

“The scare aspect of the story is ascribed to the fact that obtaining the gold from such deposits would have been very easy and the gold miners had to ward off competition by other diggers. Any gold rush would have endangered their profits and lowered the value of the gold on the market. Quite obviously there is no basic difference between ancient and modern economics!”

$ee (£15 plus taxes) Larger than foxes – but smaller than dogs: The gold-digging ants of Herodotus in Reinardus. Yearbook of the International Reynard Society, Volume 19, Issue 1, 2006, pages: 167 –178.

Note: The illustration is from the 14th century bestseller ‘The Travels of Sir John Mandeville’

Further reading: Ants at the Medieval Bestiary

Also see: (peculiar old animal related) Tracking down the Getulian dog

Rejoice? Run? Hide? The Dawn of Experimental Econophysics

Tuesday, February 23rd, 2016

Experimental EconophysicsEverything can be explained, to some degree, by marrying economics to physics. This book does that:

Experimental Econophysics: Properties and Mechanisms of Laboratory Markets, by Ji-Ping Huang [pictured here], Springer, 2014, ISBN 978-3-662-44234-0. The author explains:

180px-Jphuang“Experimental Econophysics describes the method of controlled human experiments, which is developed by physicists to study problems in economics or finance, namely stylized facts, fluctuation phenomena, herd behavior, contrarian behavior, hedge behavior, cooperation, business cycles, partial information, risk management, and stock prediction. Experimental econophysics along with empirical econophysics are two branches in the field of econophysics.”

BONUS: Principles of Topological Psychology

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