This Is the End


Markets, Risk and Human Interaction

November 5, 2007

On the Optimality of Coarse Behavior Rules

Many people ask about the source for my cockroach analogy, which I go through on page 232ff in A Demon of Our Own Design. The source for this analogy is my paper with Joe Langsam in the Journal of Theoretical Biology. So I am linking to that paper here.

The argument in the paper is pretty readable if you read past the citations and the math, and it is relevant to how we construct financial markets and manage risk in those markets.