
The father of fractals: Benoit Mandelbrot's unusual multidisciplinary approach - iProject
http://www.economist.com/node/2246127
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sethrin
It's strange how I can read an article in _The Economist_ about Benoit
Mandelbrot's "multidisiplinary" approach that makes almost no mention of his
work on Economics.

To be fair, most of the stuff that isn't pretty pictures goes past me.
However, one thing he did do was completely eliminate the validity of the
(Nobel-prize winning) Black-Scholes model.

So we have E. Fama (another Nobel prize winner) with his efficient market
hypothesis, stating that in a perfectly rational market, prices are random.
The loophole for economic theorists, and the basis for Black-Scholes, was that
price variances were thought to be predictable. Prices were random, but their
fluctuations were generally not, and could be modeled as a Gaussian
distribution. Mandelbrot suggested that this a soothing inaccuracy: prices
were capable of varying much more wildly than that. He suggested that a Pareto
distribution was more accurate.

So then we have one of the more fundamental problems in Economics: it is not a
science. It's more of a cult for math geeks, in my opinion. If you can't
_prove_ that markets follow a Pareto distribution (implying an unpredictably-
random price volatility), then why should economists listen to you? Black-
Scholes gives them partial results, and that's better than nothing, right?

Right?

B. Mandelbrot: The Misbehavior of Markets: A Fractal View of Financial
Turbulence [http://www.amazon.com/Misbehavior-Markets-Fractal-
Financial-...](http://www.amazon.com/Misbehavior-Markets-Fractal-Financial-
Turbulence/dp/0465043577)

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ChristianMarks
Once upon a time a mathematician, let's call him M, applied for a position as
a mathematics professor at a postgraduate institution. During the interview, M
proposed an unusual salary arrangement to the department chair--let's call him
D.

"I'm not asking for anything exorbitant. I ask only for $1 per year more than
the salary of anyone else here, as a token of recognition that I am a better
mathematician than anyone else in the department."

D said that he would think it over.

During their next meeting, M asked D what he thought of his proposal. D
replied that after the deepest consideration, he had decided against it.

"Why?" M wanted to know.

"Because the reason for paying you that additional dollar isn't true," D
replied.

~~~
pirer
Marcelo Bielsa, an extraordinary soccer manager, did the same thing when
interviewed for Chile's manager position. He asked for $1 more than the salary
of the best payed soccer player on the team. He made an excellent campaign for
Chile on 2010 world cup.

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mmcnickle
Many of the scientists involved in the genesis of chaos theory were active in
multiple disciplines, notably meteorology. It's a central theme in James
Gleick's _Chaos: Making a New Science_ [1]. It's a fascinating book, and would
be a great read if you were tickled by the article.

[1] [http://www.amazon.co.uk/Chaos-Making-Science-James-
Gleick/dp...](http://www.amazon.co.uk/Chaos-Making-Science-James-
Gleick/dp/0749386061)

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drallison
Just published. _The Fractalist: Memoirs of a Scientific Maverick_.
[http://www.amazon.com/The-Fractalist-Memoir-Scientific-
Maver...](http://www.amazon.com/The-Fractalist-Memoir-Scientific-
Maverick/dp/0307377350/ref=sr_1_1?ie=UTF8&qid=1352053144&sr=8-1&keywords=mandelbrot)

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anonymouz
The article is from 2003, can someone add this to the title? Mandelbrot died
in 2010.

