Re: fuzzy finance


Subject: Re: fuzzy finance
From: Paul Victor Birke (nonlinear@home.com)
Date: Thu Mar 02 2000 - 00:59:53 MET


Will Dwinnell wrote:
>>snippings<<
>
> I was just thinking that, in the end, a buyer pays only a single price. Certainly,
> before the transaction, available information may allow us to infer some distribution of
> price values, but both probability and fuzzy logic deal in distributions. Once the
> transaction has occurred, however, the price is known, which makes this seem more like a
> probability issue to me.
*************************************
Dear Will

Well, while there is only one finite price at a given time, there could
have been >>others<< ! Prices that would have been acceptable to both
the seller and the purchaser. You can really never know precisly; you
would have to run a number of purchase scenarios in some kind of
simulation to locate them. But there will exist a sort of small uniform
range which would satisfy both seller and buyer. Hence fuzzy.

Like when you purchase a Snickers Bar. Within a certain range you just
don't care. A little higher, you might say well that was a high price
and might hesitate a little before buying. If you see a low price, you
feel you got a bargain. But between these posts, there is sort of a
neutral response, in this uniform range. What others have called an
>>informationless state<<. The trick is to find this range when pricing or buying.

Paul

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