Parables from Complex Systems and Their Possible Meanings for Our Lives - Lecture 2

Explore complex systems and their real-world implications in this lecture by Professor Doyne Farmer of the Santa Fe Institute. Delve into the intricacies of predictive modeling, examining its construction, predictions, and limitations. Investigate concepts such as state space, chaos theory, and the curse of dimensionality. Gain insights into market efficiency, forecasting, and volatility. Analyze the components of a simple market model, including order flow, cancellations, and depth. Discover how parables from complex systems can offer meaningful insights into our daily lives and decision-making processes.

Intro
Thank you
Propagation
Outline
Final Lecture
Prediction Action
Building a Predictive Model
How is the Model Constructed
What is the Model Predict
State Space
Limits to Prediction
Pluck Array
Pendulum
Chaos
Wind Resistance
Prediction Machine
Norman Packard
The fortuitous phenomenon
Joe McCarthy
Curse of Dimensionality
Market Efficiency
Market Forecasting
Volatility
Liquidity
Standard Deviation
First Principles Model
The Simplest Model
Market Orders
Order Cancellation
Order Depth