3 Comments
Mar 1, 2023Liked by Joachim Klement

The logistic equation isn't quite right because it assumes no growth in the future. Even some kind of modification that has it go to asymptotic is wrong. What actually happens is that things like market share (or maybe share of dividends) tends to stabilize (and it might stabilize at some smaller share than its maximum share). In other words, when something becomes really big, eventually its growth rate slows to that of everything else.

Expand full comment
author

Correct, but you can adjust the logistics equation to add a growth term to account for inflation or other things. And you can adjust the equation to go to whatever level you want. 100 is just an example.

Expand full comment

That works fine for shares, but it's pretty awkward for things like prices. I suppose you can do a real price, but you're still going to a level of real prices. You would need to deflate by the price index with some growth rate to get the same effect as I think I'm thinking about.

Expand full comment