NOTE: This preliminary draft has been revised and expanded. The finished article can be seen here.
The preceding post, Part 7, introduced some concepts applicable to complex system analysis. These included representations of reality and a property called ergodicity. This article delves more deeply into the challenges that arise from these sources in modeling complex systems.
The complexity of analyzing a process as simple as flipping a coin three times raises concerns about how to describe reality in modeling. In dealing with coin flips, we have a known probability for the result of each flip. Also, many modeling scenarios may have more than three elementary steps. Additionally, the probabilities associated with elementary steps may not be known. How does this complicate the modeling process? This review will address that question with specific emphasis on social science models, especially economics.
Flipping a coin three times seems like a simple process. But there are myriad complications that can arise. In Part 1 of this series, we saw that data sampling for coin flips can influence how results are interpreted. In this post, we will look closely at how probability assessments (possibilities) can lead to propositions deviating from the reality ensuing when coin flips are actually carried out. We will consider the concept of ‘alternate universes’. Who would have guessed that flipping a coin three times would go there?
