First the abstract,

It is argued that drug consumption, most commonly alcohol drinking, can be a technology to give up some control over one’s actions and words. It can be employed by
trustworthy players to reveal their type. Similarly alcohol can function as a “social lubricant” and faciliate type revelation in conversations. It is shown that both separating and pooling equilibria can exist; as opposed to the classic results in the literature, a pooling equilibrium is still informative. Drugs which allow a gradual loss of control by appropriate doses and for which moderate consumption is not addictive are particularly suitable because the consumption can be easily observed and reciprocated and is unlikely to occur out of the social context. There is a tradeoff between the efficiency gains due to the signaling effect and the loss of productivity associated with intoxication. Long run evolutionary equilibria of the type distribution are considered. If coordination on an exclusive technology is efficient, social norms or laws can raise efficiency by legalizing only one drug.

And my favorite line from the paper:

If alcohol can be used to give others better information about one’s personality, the social consumption of alcohol can benefit those who would like to honestly reveal their type.

(via Tyler Cowen)

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Post tags: behavioral economy, economics, humanity

From the paper,

We have presented evidence that the proton may be considered as a Schwarzschild entity and that such a system predicts remarkably well, even under crude approximations utilizing semi-classical mechanics, its interaction time, its radiation emissions, its magnetic moment, and even the origin of the strong force as a gravitational component. We are still examining the fundamental nature of mass, inertia, charge, magnetism, spin and angular momentum in the context of the Haramein- Rauscher solution which considers spacetime torque [2]. These aspects are usually assumed as “given” without a source. Here the coherent structure of the vacuum and its gravitational curvature begin to give us an appropriate accounting of the energies necessary to produce these effects.

The Schwarzschild proton strongly suggests that matter at many scales may be organized by black-holes and black hole-like phenomena and thereby lead to a scale unification of the fundamental forces and matter.

So yeah, what does all this mean? If this model fits reality, it will have quite a few fundamental impacts for the world, not just for the field of physics. First, the theory can describe many of the fundamental properties of matter that have long escaped scientists. Such as, the origin of mass, spin, charge, etc… Reaching even further: it can describe the origin of consciousness as the feedback of information from the vaccuum. That seems like quite a claim to make but I’ll post more on Nassim’s ideas to explain how he makes that conclusion.

I’ll be interested to hear more from the research group.

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Post tags: physics, revolutionary, science

An awesome paper from Anna Krivelyova and Cesare Robotti of the Federal Reserve Board of Atlanta in 2003 proposes a link between geomagnetic fields and stock market performance. The evidence presented is quite robust and interesting. However, could traders use this information to anticipate the sell-offs thus instituting complex short-selling algorithms completely nullifying or amplifying the effect entirely?

First the conclusion: The authors find strong empirical support in favor of a geomagnetic-storm effect in stock returns after controlling for market seasonals and other environmental and behavioral factors. Unusually high levels of geomagnetic activity have a negative, statistically and economically significant effect on the following week’s stock returns for all U.S. stock market indices. Finally, this paper provides evidence of substantially higher returns around the world during periods of quiet geomagnetic activity.

Then from the abstract: Explaining movements in daily stock prices is one of the most difficult tasks in modern finance. This paper contributes to the existing literature by documenting the impact of geomagnetic storms on daily stock market returns. A large body of psychological research has shown that geomagnetic storms have a profound effect on people’s moods, and, in turn, people’s moods have been found to be related to human behavior, judgments and decisions about risk. An important finding of this literature is that people often attribute their feelings and emotions to the wrong source, leading to incorrect judgments. Specifically, people affected by geomagnetic storms may be more inclined to sell stocks on stormy days because they incorrectly attribute their bad mood to negative economic prospects rather than bad environmental conditions. Misattribution of mood and pessimistic choices can translate into a relatively higher demand for riskless assets, causing the price of risky assets to fall or to rise less quickly than otherwise. The authors find strong empirical support in favor of a geomagnetic-storm effect in stock returns after controlling for market seasonals and other environmental and behavioral factors. Unusually high levels of geomagnetic activity have a negative, statistically and economically significant effect on the following week’s stock returns for all U.S. stock market indices. Finally, this paper provides evidence of substantially higher returns around the world during periods of quiet geomagnetic activity.
Download the full PDF here

[via Entangled Minds]

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Post tags: behavioral economy, earth, finance

Might the dollar eventually follow the precedent of the pound and cede its status as leading international reserve currency? Unlike the last time this question was prominently discussed, ten years ago, there now exists a credible competitor: the euro. This paper econometrically estimates determinants of the shares of major currencies in the reserve holdings of the world’s central banks. Significant factors include: size of the
home country, inflation rate (or lagged depreciation trend), exchange rate variability, and size of the relevant home financial center (as measured by the turnover in its foreign exchange market).

The key from the paper is that,

Whether the euro might in the future rival or surpass the dollar as the world’s leading international reserve currency appears to depend on two things: (1) do enough other EU members join euroland so that it becomes larger than the US economy, and (2) does US macroeconomic policy eventually undermine confidence in the value of the dollar, in the form of inflation and depreciation.

[ via @planetmoney]

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Post tags: economy, monetary system, planet money

A few can be ruled out because they simplify various computational tasks in implausible ways. But the rest have seemed more or less equivalent. Until now.

Marcin Pawlowski at the University of Gdansk in Poland and a few pals say that the addition of a single additional consideration, quickly and easily separates the non-physical theories from the physical ones.

The idea is based around information and can be stated simply. The rule is this: the sending of “m” classical bits causes an information gain of, at most, “m” bits.

It sounds bewilderingly simple and perhaps it is. Pawlowski and co say that without this principle, non-physical theories allow extra information to be sent. They point out that the rule applies only to classical bits. In the real quantum world, extra infromation can be sent using the ideas of super dense coding.

The team say because the idea distinguishes between physical and non-physical versions of quantum mechanics, it must be a fundamental property of the universe.

Source: ArXiv blog

Abstract: Quantum physics exhibits many remarkable features. For example, it gives probabilistic predictions (non-determinism), does not allow copying of unknown states (no-cloning), its correlations are stronger than any classical correlations but information cannot be transmitted faster than light (no-signaling). However, all the mentioned features do not single out quantum physics. A broad class of theories exist which share all of them with quantum mechanics and allow even stronger than quantum correlations.

Here, we introduce the principle of Information Causality, stating that communication of m classical bits causes information gain of at most m bits. We show that this principle is respected both in classical and quantum physics, and that all stronger than quantum correlations violate it. We suggest that Information Causality, being a generalization of no-signaling, is one of the foundational properties of Nature.

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Post tags: physics

Civilization’s Cost: The Decline and Fall of Human Health
Ann Gibbons

Agriculture and cities made human life better, right? Wrong, say archaeologists who presented stunning new evidence at the American Association of Physical Anthropologists meeting. They pooled data on standardized indicators of health from skeletal remains, including stature, dental health, degenerative joint disease, anemia, trauma, and the isotopic signatures of what they ate, and gathered data on settlement size, latitude, and socioeconomic and subsistence patterns. They found that the health of many Europeans began to worsen markedly about 3000 years ago, after agriculture became widely adopted in Europe and during the rise of the Greek and Roman civilizations.

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Post tags: civilizations, papers to read