New book: An Introduction to Ergodicity Economics A new textbook by SFI External Professor Ole Peters and Alexander Adamou re-examines core assumptions in economic theory. It presents a formal challenge to expected-value thinking and shows how non-ergodicity can arise naturally in economic models.

For those of you who couldn't make it to the launch event in June, here's a video about the "why" behind writing the textbook.

The story that orthodox economics is as good as a formal theory of human behavior can ever be has been holding economic theory back for a long time. I know one formal theory that’s better than the orthodoxy.

Is there an age limit to apply?

This book has been such a delight! By my friend and mentor Reuben Hersh, about his friend and mentor Peter Lax. Reading it feels like listening to Reuben speak about his love of mathematics and his respect, friendship, and admiration for Peter.

I was listening to your podcast, @seanmcarroll.bsky.social and @pettertornberg.com. I always thought of the Schelling model as some sort of "zero-temperature Ising thing." But this time I asked chatGPT, and the exact mapping is worked out here: journals.aps.org/pre/abstract... Interesting for you?

It makes me exceedingly happy that there are people all around the world who enjoy this kind of gentle slow meditation. Social-media scatter brain be damned. And if one of them is Dave Bacon, you know it's good stuff!

1/6 How can I put this? "Expected-utility maximizers don't maximize utility." Why? Because utility is not usually an ergodic quantity in the mathematical models used by economists, and maximizing its expected value doesn't mean much in the real world.

If you're interested in studying uncertainty at Ph.D. level, this set of scholarships may be for you: www.zeit-stiftung.de/en/topics/de...

1/thread🧵 Almost 20 years ago, I started thinking about the ergodicity problem in the context of economics. That turned out to be surprisingly fruitful, and now there's a book about it. ergodicityeconomics.com/publications/

Sending this straight to the publisher.

Happy to announce that "An Introduction to Ergodicity Economics" can now be ordered. Here: ergodicityeconomics.com/publications/

So there's this country. It produces money, electronically. Then sends that money to other countries, and in return receives all the goods its citizens might want. Just for sending an electronic notification that it's created more money. And it doesn't like that.

For those of you who couldn't join us at our in-person EE2025 conference in Cascais, I've written up a dinner conversation I had with Gerd Gigerenzer and put it up on LinkedIn. www.linkedin.com/pulse/ergodi...

I don't believe in rushing things, but 10 years into the writing of the EE textbook, it's good to see the cover is ready. If you want a ping when it's ready to order (very soon), sign up to our EE mailing list at ergodicityeconomics.eo.page/4ct3k

1/2 I would love a deep dive on the clock ambiguity. If I understand it correctly, then there's a fascinating parallel to expected-utility theory. You can solve certain problems in economics by picking a non-linear utility function. But we've found that that corresponds to assuming (or generating)..

Point of view: Expected-utility theory has been the dominant model of economic decision making for 300 years. That does not mean it's a good model. It's such a convoluted disaster of formal errors, misunderstandings, failed corrections etc. that critics just give up.

Conundrum: Stock markets generate prices every few seconds to accurately reflect the rapid changes in the fortunes of businesses. But the fastest-paced industries, tech/biotech, barely use public markets. It's more VC, and valuations and trades happen ~once per year. fast pace -> slow valuation?

Here's something fun: models indicate that in the US, average wealth is a repellor. Good news: you just have to become wealthier than the average, and then you can sit back and watch the money come in. Bad news: average household wealth is just above one million bucks.

Jeremy Hunt said this. He is, of course, completely right. The question for me is how anyone who’s thought about capitalism for more than two minutes could ever get this wrong. It’s astonishing.

Interesting etymologies in English v German. tax -- from Latin taxere, to assess or charge (a compulsory charge) Steuer (German word for tax) -- from stiu for "help" or "support" (supporting a community)

I often misread "uninformed" as "uniformed." Has anyone else experienced this?

Given that humans operate at about 80W and, if knowledgable, can produce answers at least as good as those of large language models — is there going to be an enormous efficiency revolution in AI, @melaniemitchell.bsky.social ?

Serious question for anyone knowledgeable of the health system. The UK waiting list for elective surgery is long. Couldn’t some of those elective surgeries be carried out abroad where there’s more capacity?

I follow mostly British news. Every winter, hospitals overflow and patients are treated in corridors. Today I tuned into German news. Germany has too many hospitals and will spend EUR50bn to reduce excess capacity. If only hospitals were more mobile…

Nice little application of ergodicity economics to reinforcement learning, published just now. The ‘economics’ in the name of my research program is sort of a frozen accident…

This comment on Emanuel's book, by the 2003 Nobel Laureate in literature, makes me very happy. Congratulations!

1/2 Sometimes we learn something surprising about ourselves. Many years ago, I was out on my skateboard in central London. A pebble caught my wheel, I fell, and the board zipped off and hit a parked taxi. I went over to check if there was any damage and to offer to pay for it.

For example, when we work in the t->infty limit in ergodicity economics, it's not the positive statement that we assume that people live forever. Instead, it's the negative statement that we assume that for this computation we can ignore the boundary imposed by their finite lifetime.

I’ve written a book. When I now re-read sections, I find them delightful. It seems this is what I wanted to do: write a delightful book. I’m sure my publisher will get very rich from it but I’m happy to report that feels irrelevant. I wanted to write it, and that’s done. Does that make sense?

The term "ergodicity economics" is less than a decade old. But the developments that led to its coining go back centuries (or millennia, depending on how you count). I wrote about its history here: ergodicityeconomics.com/2024/02/05/e...

Good to read how other people put it. A nice summary of a core argument of ergodicity economics. Utility theory is a solution born from the paucity of the mathematics of the time of its invention. Astonishingly, it still crowds out better approaches. sinaas.blogspot.com/2020/02/warr...

When it comes to gendering, the Portuguese have the solution. They just mumble, eliminating any perceivable difference between male and female endings.

So refreshingly down-to-earth (this is Reuben Hersh). I often talk about infinity as an error message. Using Reuben's language, if a computation ends up with "infinity" then we've hit the boundary of the domain we're studying, a boundary we thought we could ignore. content.ems.press/assets/publi...

These days between the years are so productive. I have no idea how but I came across this lovely conversation between Ulf Persson and Reuben Hersh. It captures the Reuben I knew. Playful, even rambling at times, but fearless and sharp on the important bits. content.ems.press/assets/publi...

Something I've wondered about. 1. Fuel prices in Europe are 200% or 300% of those in the US. $8 or $9 per gallon is normal in Europe. 2. GDP per capita is 50% higher in the US. In how far is 2. just a consequence of 1? What would happen if energy was as cheap in Europe or as expensive in the US?

The sort of madness I'm here for. Bluesky awaking cherished memories of old Twitter.

1/ I didn't know Philip Zimbardo had died in October. I read "Influencing attitudes and changing behavior" twenty-something years ago, cover to cover, with deep interest. Now reading "The Lucifer effect". The first ~200 pages are a detailed account of the Stanford Prison Experiment.

No man ever reads the same Heraclitus twice.

Came across this in a book by Philip Zimbardo. Tagore…he was onto something.

The program for our ergodicity economics conference, EE2025, is now online. lml.org.uk/ee2025-progr... Have a look and sign up at ee2025.rsvpify.com if you want to join us (note: online event first, in-person event separately, the week after).

The ergodicity-economics community is just the best. The annual conferences are an opportunity for those who can to provide a little support for those who need it. And that's exactly what happens. This message arrived yesterday. Abstract deadline today. ee2025.rsvpify.com

The deadline to send in an abstract is tomorrow. Submissions look great so far. Keep 'em coming!

DHL are in the wrong business. They should be portfolio managers.

I've made a little video invitation for our ergodicity economics conference, EE2025. Here it is: youtu.be/GUoT7QLzkYo?...

In a mildly reasonable world, the first thing economics students would be taught is how to rid themselves of the unfortunate universal intuition of using expected value to assess uncertain prospects. But, alas...

The first physical test prints of the textbook have arrived. Exciting!

putting ketchup on choucroute: kraut-saucing.

The EE2025 conference is themed `Good decisions.' Ergodicity Economics challenges the universality of expected-value maximization as a good decision criterion. So does Gerd Gigerenzer's heuristics program. Gerd and his group are coming, to compare notes with us. Join via ee2025.rsvpify.com

Some years ago, I happened to be seated next to a Fields medalist at a dinner. I couldn't help myself and asked him what he was working on. I was fully aware that I wouldn't understand a word. But to my surprise I did. "Number theory. You know? 1, 2, 3."