Hacker News new | ask | show | jobs
by confluence 5009 days ago
True but at least the hard sciences modify after being falsified.

The social sciences don't have to because they aren't based on the scientific method - mainly the design and independence of repeatable experiments with controlled variables.

Hard science equations have no room for bullshit whereas the social ones do - hence EMH is still taught.
2 comments
yummyfajitas 5009 days ago
The social sciences don't have to because they aren't based on the scientific method - mainly the design and independence of repeatable experiments with controlled variables.

The same is true of many physical sciences - geophysics, oceanography, climate science, astronomy, etc. Your criticism applies to basically any scientific theory which has poorly understood microfoundations (i.e., a lot of them).

The EMH is taught because it's a useful approximation to reality, even if it's imperfect. Or, as the article puts it: Whether markets are efficient or not, and whether P = NP or not, there is no doubt that there will be markets that can allocate resources very close to efficiently and there will be algorithms that can solve problems very close to efficiently.

Incidentally, the EMH claims that financial crises are unpredictable. So the lack of useful predictions of the financial crisis is evidence in favor of the EMH.

[edit: Note, in response to Dn_Ab that 3SAT, the problem considered by the paper, is NP complete.]

link
Dn_Ab 5009 days ago
But he is not, in that quoted statement saying much. For example, if the problem is NP-Hard but not NP-Complete then we will not even be able to tell how well we are doing.

Or for markets, aspects of it may invovle solving NP-Hard problems with efficient approximations that are themselves NP-Hard (you are better placed to opine on whether such a possibility is likely).

link
confluence 5009 days ago
Well then add them to the list.
link
jbrechtel 5009 days ago
I don't know. We've seen the idea of rational agents in economics go away, right?

Also...I'm not an economist so I don't really know what's going on in this area...but maybe EMH is still being taught because it's the best model we have at the moment?

Are you sure it's being taught everywhere? Maybe some places have already dropped it? Change takes time.

link
confluence 5009 days ago
Rational actor model still reigns supreme.

EMH is taught globally and it will continue to be taught until such a point as people stop believing.

link
jbrechtel 5009 days ago
Awkward...
link
confluence 5009 days ago
What do you mean?
link