Bacteria Behaviour Can Shed Light On How Financial Markets Work 91
notscientific writes "Bacteria invest in proteins in an attempt to reduce stress or increase energy intake, while humans invest in cash. In both cases, better tradeoffs pay off. The similarities in tradeoffs faced by both bacteria and humans during investment are actually quite similar. Now, using synthetic biology, a group of scientists has shown that the outcomes of investment decisions in bacteria can be precisely defined, alluding to the idea that human investment activities, such as financial markets, can be thoroughly understood as well, and even modelled."
It's all been done...before -- Barenaked Ladies (Score:2, Informative)
> boom and bust cycles
and
> It explains why a single-celled, fat cat investor or Darwinian demon (a hypothetical organism) didn’t win out long ago.
We know why already -- these, along with predator-prey relationships, are all subsets of supply and demand. Differential equation modelling of predator-prey showed stability was, in fact, not possible. Like a breeze across the water, the relative ratios distort a bit, say, the prey become more numerous. The predators increase because the supply of food increases, and they overshoot, causing it to crash. This in turn causes predator populations to crash, allowing the prey to rebound.
The important thing was this cyclic up and down was the norm, not the exception. Any steady state immediately begins destabilizing .
The same for economic cycles, as born out by people putting housing or car purchases on hold.
And now the observation that investors getting the crap scared out of them by talk of huge tax increases doesn't seem so unlikely anymore, does it?
(Insert picture of Morhpeus here) What if I told you this outweighed government investment to spend out of a recession by an order of magnitude?