FRACTAL ECONOMICS

Is our mind a fractal object or pattern collector, and if so, does the fractal explain laughter, and sadness - as the object changes shape changes? This entry follows on from my earlier blogs on equilibrium, particularly from the shape being set at or around iteration 7. Fractal development: Koch snowflake and equilibrium at iteration 7 Could it be that this is how our minds recognise  –  and know  –  objects or shapes? If the universe is full of repeating patterns, then to know something, all we need is a collection patterns; we don't need any detail at all. This can be demonstrated (below) by Koch snowflake development: as the snowflake develops, the 'stickman' develops; at some point  –  around 7 plus or minus 2 iterations  – the shape is known, the stickman is defined. At iteration one, we know nothing. In the above diagram we see the fractal development of a humanly figure. At iteration 1 the shape is not known; by iteration 5 we know it is a recognisab

The paradox of value or the diamond water paradox is well established and it is not my intent to challenge it but rather show that the fractal complements it. – explains it.  As I have shown earlier, the demand curve is derived from the fractal, it follows that if there is any substance of truth to my thinking it must address the likes of this paradox too. The answer to this paradox of value goes: diamonds are valued highly as they are assumed scarce, they have low Total Utility and a high Marginal Utility (or value). Goods similar to this are positioned to the left of any Marginal analysis diagram. Water is less valued than diamonds a it is (assumed) abundant. Water has high total utility and low marginal utility. The fractal offers an explanation to this paradox - or at least demonstrates.   If the object is not developed – fractally speaking – then it is positioned to the elastic left end of the fractal MA curve in Fig. 1: another iteration will return similarly high

Fractal Pareto Efficiency In a comment made on my fractalnomics youtube clip, Pareto and the fractal came up – is there a connection? Not to take the creativity from the person with the question, I began to think about it myself.   Pareto efficiency is where: one cannot be made better off without making another worse off.  It is said to be achieved at your full potential or market equilibrium. Fractal Pareto Efficiency Since the fractal demonstrates and shows market equilibrium (see my earlier work), fractal equilibrium is also the point of Pareto efficiency. Further to this - and trying to be in line with the Pareto efficiency definition (above) -  the merging of  fractal development with fractal decay (as seen below), shows fractal Pareto Efficiency, where: ('new') information cannot be gained, with losing ('old')information. or, put another way - we cannot go forward or grow without leaving something behind.

Ceteris Paribus - keeping all other factors equal or constant. Fractal Isolation This entry is to show that fractal demonstrates and shows us that Ceteris Paribus exists in reality, and has connections directly to our understanding of reality - even possibly at the atomic scale.   Ceteris Paribus  is a central assumption behind economic models and analysis - and of course, unbeknown to others, all science itself. It assumes, or sets, all other factors equal or constant; this allows us to study the pattern of the object in question. Without it, the 'cause' and the 'effect' would not be discernible - or would be confused in the 'chaos'. I often explain it to those outside economics that this is our way of achieving a controlled laboratory experiment. Alas it is also seen as the weakness of economics, as we don't (really) live in a 'ceteris paribus' world, we live in the chaos.  I would strongly argue - again -  that this is the weakness of all t

This entry is an addition to my earlier work on fractal marginal utility, something I have been reluctant to add due to the consequences of such a statement. I am convinced that that negative  marginal utility  is misattributed: that the MU curve does not go negative as shown below. Wikipedia. The fractal shows us that production and benefit go together are never seperated, you cannot have one without the other. The increasing  marginal cost (MC)  after fractal equilibrium, (green in Fig. 2 and 2b below), is more than enough to account for this 'negative marginal utility'. The cost rises - greater than the satisfaction or benefit  -after fractal equilibrium : this is feeling of being ill after excess consumption, of having had too much of something.

I put it out there, paradigms are a fractal phenomena. This insight is only a day old (2011-09-02): It was inspired by talking to one of my students. Last year I saw that she (not knowing it) drew or doodled  Sierpinski  fractals (below) in the corner of her work books - and I thought it was pretty cool. I pointed out to her  - at the time - that she could only draw down to 7 plus or minus 2 different triangle sizes in one doodle. Yesterday, she came back to me and questioned me again on this: Is that the limit? 7?  I went on to explain that 7 plus or minus 2 at one one standing or view, or perspective ; but if we zoom in, we will see more and more - as they come into focus; but there will always be 7 - yes. It came to me later, this standing or perspective is a paradigm, and is demonstrated by the fractal development below. The paradigm is the view from the first iteration to fractal equilibrium. A change in paradigm comes with a  zoom into the fractal (universe) - le