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Optimal Does NOT Mean Best

In the second half of the twentieth century it has become very popular to seek optimal solutions to a broad spectrum of problems: portfolios,  engineering systems, strategies, traffic systems, distribution channels, networks, policies, etc. But have you ever wondered if optimal really means best? Well, it does not. Optimality is not the most convenient state in which to…

InMathWeTrust

In Math We Trust. That is Precisely the Problem.

The economy is a dynamic system which is far too complex for us to understand. Human nature is extremely complex and billions of irrational humans form the economy. How can such a system ever be thought to be inherently stable as many prominent economists have sustained? But this system, like every other natural or man-made…

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Optimality: The Recipe for Disaster

There still seems to be a rush towards optimal design.  But there is no better way to fragility and vulnerability than the pursuit of peak performance and perfection – optimality in other words. But let’s take a look at the logic behind this risky and outdated practise:  Based on a series of assumptions, a math model…