

WiM045 - The Vervaeke Series | Episode 2 | Wisdom and the 4 Levels of Knowing
Sep 9, 2021
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Price as Data Compression in Markets
- Value is expressed through individual relevance realized by action, which collectively compresses into a price signal in distributed cognition.
- This price serves as an objective data compression reflecting demand and supply dynamics in the market system.
Tradeoff in Data Compression
- Data compression helps generalize and predict but loses nuance, increasing surprise by novelty.
- Overcompression is useful in stable environments but fails when radical shifts demand refined discrimination.
Ecologically Embedded Rationality
- Human cognition is ecologically embedded, not disembedded or purely computational.
- Rationality is bounded not only by computation but also by biological and environmental context.