Using Benford’s Law to Detect Bitcoin Manipulation


For a while, there was a popular belief among finance professors that the stock market is “efficient” in the sense that stock prices are always correct — the prices that an all-knowing God would set. Thus, investors can buy any stock, even a randomly selected stock, and be confident that they are paying a fair price. … Read more

No Free Lunches: Bernoulli is Right, Keynes is Wrong


Jacob Bernoulli made a now obvious observation about probability over three-and-a-half centuries ago: If nothing is known about the outcome of a random event, all outcomes can be assumed to be equally probable. Bernoulli’s Principle of Insufficient Reason (PrOIR) is commonly used. Throw a fair die. There are six outcomes, one for each face of the cube. The … Read more