Dragon kings

Now HERE’s some reassembly:

Dragon Kings, Black Swans, and the Prediction of Crises

We develop the concept of “dragon-kings” corresponding to meaningful outliers, which are found to coexist with power laws in thedistributions of event sizes under a broad range of conditions in a large variety of systems. These dragon-kings reveal the existence ofmechanisms of self-organization that are not apparent otherwise from the distribution of their smaller siblings. We present a generic phase diagram to explain the generation of dragon-kings and document their presence in six different examples (distribution of city sizes, distribution of acoustic emissions associated with material failure, distribution of velocity increments in hydrodynamic turbulence, distribution of financial drawdowns, distribution of the energies of epileptic seizures in humans and in model animals, distribution of the earthquake energies). We emphasize the importance of understanding dragon-kings as being often associated with a neighborhood of what can be called equivalently a phase transition, a bifurcation, a catastrophe (in the sense of René Thom), or a tipping point. The presence of a phase transition is crucial to learn how to diagnose in advance the symptoms associated with a coming dragon-king. Several examples of predictions using the derived log-periodic power law method are discussed, including material failure predictions and the forecasts of the end of financial bubbles.  —- Abstract

 

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6 thoughts on “Dragon kings

  1. wow just when I thought science couldn’t get any less rigorous we get taken one step further toward pseudoscience.

  2. Hahah. This needs a Caissic translation.

    More from the paper: “Think of a ruler held up vertically on your finger: this very unstable position will lead eventually to its collapse, as a result of a small (or absence of adequate) motion of your hand or due to any tiny whiff of air. The collapse is fundamentally due to the unstable position; the instantaneous cause of the collapse is secondary.”

    Even more: “We have presented supporting evidence for the concept that meaningful outliers (called “dragon-kings”) coexist with power laws in the
    distributions of event sizes under a broad range of conditions in a large variety of systems. These dragon-kings reveal the existence of mechanisms of
    self-organization that are not apparent otherwise from the distribution of their smaller siblings. This leads to two consequences, one pessimistic
    and the other one more optimistic. The first one is the unavoidable evidence that extreme events occur much more often than would be predicted or expected from
    the observations of small, medium and even large events. Thus, catastrophes and crises are with us all the time. On the other hand, we have argued that the
    dragon-kings reveal the presence of special mechanisms. These processes provide clues that allow us to diagnose the maturation of a system towards a
    crisis, as we have documented in a series of examples in various systems.”

    Translated into the language of Caissa:

    Think of the White side of the Hedgehog formation: this very unstable position will lead eventually to its collapse, as a result of a small (or absence of adequate) mobility of the White pieces. The collapse is fundamentally due to the unstable position; the actual move to cause the collapse is secondary.

    We have presented supporting evidence for the concept that meaningful variations of the Sicilian Defense (called “dragon-kings”) coexist with other openings in the repertoire under a large variety of systems. These dragon-kings reveal the existence of novelties that are not apparent otherwise from the position. This leads to two consequences, one pessimistic and the other one more optimistic. The first one is the unavoidable evidence that poor positions occur much more often than would be predicted or expected from the execution of dragon-kings. Thus, catastrophes and crises are possible on the chessboard all the time. On the other hand, we have argued that the dragon-kings reveal the presence of special plans. These plans provide clues that allow us to diagnose the nature of the position before it reaches a crisis, as we have documented in a series of examples for various openings.

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