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TagBenford's Law

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Using Benford’s Law to Detect Bitcoin Manipulation

Market prices are not invariably equal to intrinsic values

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. This belief was based on seemingly overwhelming evidence that changes in stock prices are difficult to predict. Efficient market enthusiasts argued that if stock prices are always correct, taking into account all currently available information, then any changes in stock prices must be due to new information which, by definition, is impossible to predict. Therefore, the evidence that changes in stock prices are hard to…

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How the Explanatory Filter Can Help Quash Conspiracy Theories

I found Dembski’s explanatory filter quite helpful in investigating voter fraud claims

William Dembski’s explanatory filter is a decision strategy for identifying events that are unlikely to have happened purely by chance. The filter proceeds in three main steps, which can be illustrated via the plot device in Contact, a novel (1985) by Carl Sagan, followed by a film (1997): Eliminate events of large probability (necessity): A radio telescope receives a pattern of beeps and pauses. Perhaps the pattern seems strange to us but we could just be overinterpreting inevitable space noise. Eliminate events of medium probability (chance): The pattern turns out to be a sequence of prime numbers. However, large randomly generated numbers sometimes feature apparent patterns (five 5s in a row, for example) that don’t signify anything. Specify the event…