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 Adjunct professor Arnold Kling offered a terser précis of the GMU way. “My simple way of describing it is that at Chicago they say, ‘Markets work; let’s use markets.’ At Harvard and MIT they say, ‘Markets fail; let’s use government.’ And at George Mason, we say, ‘Markets fail; let’s use markets.’” This seeming paradox means, that GMU sees plenty of deviations from the “perfect neoclassical paradigm,” which requires “perfect information, perfect competition,” but that unlike Harvard or MIT, they do not automatically “ring a bell and say, ‘We need more government.’ Markets come up with solutions to problems of information.”

After a few days of dreaming that the Kelly Criterion got rid of axiomatic risk adversity, it's back. Tried some simple, small cases with Eric Zimanyi today, and couldn't convert optimality of the expectation value into anything resembling risk adversity for individual time slices. ARGH.

I have put up my Asset Allocation scheme for the Facebook Fantasy Stock Exchange up here.

The sheet named "Tally" shows daily changes, while the sheet "Allocation" shows the allocation targets and howoff the portfolio is. TOGO shows the amount that needs to be changed to bring the portfolio back into balance.