Re:Finding Signal in the Noise: Machine Learning and the Mar...
by LeroyRaz on Saturday March 15, 2025 @10:47PM
(#43376625)
Money Extraction: fighting over a slice of pie.
Wealth Creation: creating new pie.
In practice, a lot of things that look extractive (e.g., designing better high frequency trading algorithms) potentially have some marginal utility (e.g., creating market liquidity), but the money these people make is likely larger than the utility they add to the system (because most of the money in having the best high frequency trading algorithm comes from beating other people's high frequency trading algorithms).
Wealth Creation: creating new pie.
In practice, a lot of things that look extractive (e.g., designing better high frequency trading algorithms) potentially have some marginal utility (e.g., creating market liquidity), but the money these people make is likely larger than the utility they add to the system (because most of the money in having the best high frequency trading algorithm comes from beating other people's high frequency trading algorithms).