Epstein Secrets

have the advantage." Claude Shannon [Tribus & Mclrvine 1971]. I find the last quote very reassuring. In my own opinion, though less well known than Einstein, Von Neumann ranked close to Einstein in terms of genius. Like Einstein, he didn't merely bring in a single profound new idea; but seemed to change

st is in that of finance. The earliest work on random walks was that done by the mathematician Bachelier on stock prices. Bachelier's work predates Einstein's own random walk model of Brownian motion. For half a century Bachelier's work was largely forgotten. The use of random walks in finance was rekin

cal analogy, in the work of Leon Walras, Vilfredo Pareto, Irving Fisher, and Francis Y. Edgeworth (to name a few of the more important figures). In Walras' equilibrium each subsystem (firm or household) deterministically maximizes profit or utility facing uniform prices "cried out" by an "auctioneer':

arently without raising questions about the non-statistical conception of the equilibrium systems Fisher was studying. Francis Edgeworth distrusted Walras' conception of the auctioneer enough to propose an abstract combinatorial model of exchange, based on the idea of recontracting among coalitions of

nd demand. In Handbook of Financial Markets: Dynamics and Evolution, ed. T Hens, KR Schenkhoppe, pp. 57-130. Amsterdam: Elsevier Bray A, Graham 3, Harvey C, Michaely R, 2005. Payout policy in the 21st century. Journal of Financial Economics 77,483-527. van den Berg H, 2010. Mathematical Models of Biolo

d 'common sense' and simply worked out the mathematical consequences of this fact. Thus was relativity born. Economists seem to prefer the route of Einstein's peers, forever producing more complex theories to substantiate the existence of a hypothetical aether. Science can not be built simply on common

a study of such a Classical, infinite-horizon, production-based model before Arrow and Debreu used the same tools (mostly topological) to formalize Walras. [Foley 1990] The idea that production rather than exchange is the source of value is contentious within mainstream economics, though why this is

words alone. One less something nearer zero, whether that something (the thrift index) is positive or negative, is nearer one. The wonderful books of Einstein (with Enfeld) and Steven Hawking, not to mention Mill, show that even calculus can be put that way. My task has been to follow their tough act. But I

iom in his Outline of 1836. The biological imperative lapsed from attention when the first generation of marginalists, led by Jevons and Menger, with Walras soon to follow, thought it unscientific to explain or justify tastes. It reemerged a century later in bioeconomics, much of which looked for economic