Mr. Klement, you're to be forgiven for referencing evolution in explaining human behavior (though the blog post doesn't really reference the mechanics of evolution at all). That seems to be the norm in modern financial literature.
But I will play the fool and challenge the entire concept of evolutionary psychology as an empirical science. It seems to me more of a philosophy based on storytelling than anything you can test or prove. I leave you with the challenge of digging all the way down to its first principles to see whether you agree. I would also be happy to refer you to some resources if you are curious.
PS, you don't need to tell anyone if your faith in the "science" gets shaken.
Please use this one, just for the benefit of this post. I am going to forward several more via email to avoid hijacking your post. But my main point is that we should think critically about what the academic establishment is accepting on this issue, as to me, it doesn’t hold up to critical thought.
I am fully aware that evolutionary psychology is a debated issue in academia. Top me it is like technical analysis in finance. You might find it useless or useful. My view is if it helps me make money and better understand investors, I will use it.
Your light-hearted piece provoked some heavy thinking! Let‘s assume, just for fun, that the test-subjects pursue the highest geometric average payoff (instead of the arithmetic average). To do this, they must cheat a little and replace the payoff of zero with a very small payoff of 1 cent. The outcomes are:
A: $ 1 million
A*: $1‘023’050
B: 7 cents
B*: 6 cents
Now for the Chinese experiment with thousands, instead of millions.
A: $1‘000
A*: $1‘096
B: 3 cents
B*: 3 cents
Lastly, the geometric payoffs for the Chinese experiments with the original millions, but with improved probabilities:
A: $1 million
A*: $1‘830‘000
B: 35 cents
B*: 47 cents
Your piece suggests that women are quicker to apply the geometric average payoff than men are. I for one am happy with the evolutionary explanation: hunting can be life-threateningly dangerous, but someone had to do it, even though the path-dependent outcome does not look great, compared to foraging. It follows that evolution would favour species where the hunters are blind to the fact that they should use the geometric mean for their health-choices, not the arithmetic mean.
Mr. Klement, you're to be forgiven for referencing evolution in explaining human behavior (though the blog post doesn't really reference the mechanics of evolution at all). That seems to be the norm in modern financial literature.
But I will play the fool and challenge the entire concept of evolutionary psychology as an empirical science. It seems to me more of a philosophy based on storytelling than anything you can test or prove. I leave you with the challenge of digging all the way down to its first principles to see whether you agree. I would also be happy to refer you to some resources if you are curious.
PS, you don't need to tell anyone if your faith in the "science" gets shaken.
Dear Peter, might I also ask for sources challenging evolutionary psychology? That would be very helpful!
I will do so once I’m away from work and have found good ones to start. In the meantime, look up your fellow German Gunter Bechly.
Please use this one, just for the benefit of this post. I am going to forward several more via email to avoid hijacking your post. But my main point is that we should think critically about what the academic establishment is accepting on this issue, as to me, it doesn’t hold up to critical thought.
https://link.springer.com/article/10.1007/s13752-019-00336-4
I am fully aware that evolutionary psychology is a debated issue in academia. Top me it is like technical analysis in finance. You might find it useless or useful. My view is if it helps me make money and better understand investors, I will use it.
"It seems to me more of a philosophy based on storytelling than anything you can test or prove"
Economist: *sweats nervously and changes the subject*
Your light-hearted piece provoked some heavy thinking! Let‘s assume, just for fun, that the test-subjects pursue the highest geometric average payoff (instead of the arithmetic average). To do this, they must cheat a little and replace the payoff of zero with a very small payoff of 1 cent. The outcomes are:
A: $ 1 million
A*: $1‘023’050
B: 7 cents
B*: 6 cents
Now for the Chinese experiment with thousands, instead of millions.
A: $1‘000
A*: $1‘096
B: 3 cents
B*: 3 cents
Lastly, the geometric payoffs for the Chinese experiments with the original millions, but with improved probabilities:
A: $1 million
A*: $1‘830‘000
B: 35 cents
B*: 47 cents
Your piece suggests that women are quicker to apply the geometric average payoff than men are. I for one am happy with the evolutionary explanation: hunting can be life-threateningly dangerous, but someone had to do it, even though the path-dependent outcome does not look great, compared to foraging. It follows that evolution would favour species where the hunters are blind to the fact that they should use the geometric mean for their health-choices, not the arithmetic mean.