J. Doyne Farmer's paper and why Psychology of crowd is overated as cause

Discussion in 'Psychology' started by harrytrader, Jan 29, 2004.

  1. <IMG SRC=http://www.elitetrader.com/vb/attachment.php?s=&postid=419959>
  2. That's why although what I say is against common belief it is not totally unfounded:

    "I affirm that it is not so much psychology or behavior of the crowd that can explain (although it plays a role but it is indirect) market's waves than something else and this paper from J. Doyne Farmer that denies that Crowd behavior plays such an important role as traditionally attributed by the common belief of behavorial school and traditional technical analysts is a step towards the truth. What I say if that there is a big confusion between cause and effect as I said already in past threads. This is not rare in history of science."
  3. Reading ET tends to confirm the zero intelligence thesis.

    But just one thing....can anyone who read that paper summarize the rules these agents used to make decisions?
  4. Harry,

    I would be interested in hearing what your understanding of Doyne's thesis is.
  5. Was that written before or after he demonstrated no ability to trade using his theories?
  6. AAA,

    if you know of the track record of Farmer et al, I would be interested.

    PS : I mean their record in trading securities, as opposed to trading their company to O'Conner, UBS etc :)
  7. I don't know their record, but I read the book, The Predictors, and recall that their initial, and somewhat naive , efforts were unsuccesful. As I recall, they hired a guy who brought along a neural net model he had developed elsewhere and they made money using that. The book was pretty thin on what they were doing however. Obvivously some big money people thought they had something.
  8. I swapped emails with Farmer a while back and he mentioned that company is alive and well, and more importantly, making money.

    Does anyone have a link to the full paper? I couldn't find it on the Sante Fe Institute's website.

  9. #10     Jan 29, 2004