Epsilon Theory: American Bandstand

Today's note, "American Bandstand", looks at recent market-roiling events (ECB meeting, December jobs report) through a game theory lens. So much of what happens in markets today seems illogical from a traditional economic theory perspective, but makes sense when understood as a strategic interaction stemming from our biological foundations as a social animal. Game theory is a bridge between the hot-blooded language of these hard-wired social behaviors and the cold-blooded language of formal mathematics, and that's why it's such an important part of the Adaptive Investing toolkit.

I'm trying to stick to a 3 weeks on / 1 week off schedule with these notes, so nothing published next Sunday (unless something interesting comes up and I just can't help myself .. which seems to happen more often than not). But I'll be back on Feb. 2 with something that I think you'll find useful.

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