Before you start to solve a problem (a numerical problem) you should check its conditioning. An ill-conditioned problem will produce very fragile and unreliable results – no matter how elegant and sophisticated solution you come up with it will be vulnerable. Think of a simple and basic problem, a linear system of equations: y =…
Isn’t it time to review our theories on economics, to see them in a radically different light? What lessons are we learning from this and other crises, if any at all? In the 1930 around 10000 banks have defaulted. The total amount of assets involved was equivalent to approximately 100 billion of today’s dollars. In…
Ludwig Wittgenstein sustained that “what cannot be debated should not be debated”. We say that what cannot be modeled should not be modeled. Otherwise one faces making massive investments with no tangible return. Based on our current understanding of physics and using our contemporary mathematics certain things are “impossible to model”. Therefore, we should not…
For someone who has been doing simulation for the last 30 years it is not easy to say no. Large consulting firms are correct when they state that Complexity Management is going to become an indispensable tool of the future. Ontonix claims is it also the foundation of a new way of seeing corporate strategy.…
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…
“.. the effective management of risk is one of the core strengths that has made Lehman Brothers so successful” (from above image, October 28-th, 2008). Ever since the financial meltdown, rating agencies have been under fire. And so has risk management. Setting aside considerations of political nature, it is evident that risk ratings and…
Extreme problems are very large-scale multi-disciplinary problems, involving thousands of variables and which cannot be solved using conventional technology. In such situations, it is impossible to determine the cause of the problem not only because of its sheer size but, most importantly, because it is frequently perceived through conventional eyes and distorted by narrow and…
