There was a radio stock market model in the economics literature this was due to Robert Lucas who's super bright theoretical economist at University of Chicago. The problem was it didn't work in other aspects for example there's no trading at all in this model everybody was identical so if one agent or one investor wanted to sell a stock think it would go down everyone was identical and they'd all want to sell. There are no times of immense volatility followed by quiescence which is a hallmark of rail stock markets what we did then was to take out the hyper rational identical investors and we slid in a module where each investor was in principle different They started off with different ideas or random ideas and some
In our last episode, we heard from W. Brian Arthur, who shared his journey in economics as he studied increasing returns. Now, Brian's going to take us to 1987, to a small meeting in the Rockies in Santa Fe. At this time, he was struggling to gain recognition for his work within the economics community, but it was when Brian went to what would become the Santa Fe Institute that things really kicked off.
In this episode, you're going to hear again from W. Brain Arthur, External Professor at the Santa Fe Institute, and Researcher at Palo Alto Research Center, as he remembers the early days of the Santa Fe Institute. From the early meetings of economists, physicists, and a biologist that started it all, to an early model Brian built of a stock market that was unique to any models before it — because this model included booms and busts.
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