Sunday, March 10, 2002

DISORDER INSIDE AND OUT: The New Scientist has the story that some people can somehow read the structure of chaotic systems, and explains, if you were ever wondering, the difference between random action and chaotic action:

Richard Heath, who has now moved to the UK's University of Sunderland tried to identify people who can do this by showing volunteers a list of eight numbers and asking them to predict the next four. The volunteers were told that the numbers were maximum temperatures for the previous eight days. In fact the numbers were computer-generated: some sets were part of a chaotic series while the rest were random.

Random sequences are by their nature unpredictable, whereas chaotic sequences follow specific rules. Despite this, chaotic sequences are very hard to predict in practice because of the "butterfly effect" - even an unmeasurably small change in initial conditions can have a dramatic impact on their future state.

Nonetheless, Heath found that a quarter of the people he tested could predict the temperature for at least the next two days if the sequence was chaotic, rather than random, even though there is no obvious pattern to the figures.

"The $64,000 question is what is going on in their heads," says Heath. He is now planning studies to find out whether the skill is related to specific personality types, or to aspects of intelligence such as mathematical ability.

He thinks this is why some people are so good at playing the market --they have chaos decryptors as part of the architecture of their minds. Cool. I love these reports from the economics-physical sciences nexus.

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