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Comment: It is impossible for a system to predict itself (Score 1) 676

by gonvaled (#37853834) Attached to: Why Economic Models Are Always Wrong
unless all its activity is used in the act of prediction (the universe predicts itself in real time, but does nothing else). It will be always difficult for humans to openly predict the behavior of humanity. The reason is simple: if you openly predict accurately the future, the margin to profit from that knowledge is so big, that the market will modify the trend, and your prediction will meaningless. The only way to predict the future with a high degree of accuracy, without influencing it with the prediction you must do two things: - do it secretly, in a small group, so that there is no "market" - do not use your knowledge to alter in a big way your prediction. That is, you can profit from your prediction, but not too much compared to the quantity being predicted. A concrete example: I predict rightly that the price of oil will be 200$ in one month. If I make that prediction open, and the market trusts me, the market will immediately adjust to that prediction. Those market forces will render my prediction completely moot. If, on the other hand, I keep that prediction to myself, I can profit from it as long as my profits are not affecting in a big way the price of oil.

"Stupidity, like virtue, is its own reward" -- William E. Davidsen