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  • Writer's pictureDoug Howarth

Hypernomics, Missing Dimensions, & Price Determination: 2nd in a Series

“Everything must be made as simple as possible. But not simpler.” ― Albert Einstein In the last post, Paul Samuelson said equilibrium prices exist where supply meets demand. While prices for simple products work that way, Value analyst Sheila (A) suspects markets for more complicated products behave differently.  She knows she can account for mountaintops using latitude, longitude, and altitude referencing the equator, prime meridian, and sea level, respectively (B). With each of the 44 dots representing a unique flat screen tv’s features and price, she finds she can plot the model’s size (C) or cycles per second (D) against prices and get significant but mediocre R2s.  She works to improve her prediction. In E, she discovers she can plot Price (Dim 3) against the tv’s refresh rate (Hz, Dim 1) and its size (Diag. “, Dim 2) as ordered triples, using an origin of (0,0,0) as a starting point.  With Hz and Diag. “ as Valued Features 1 and 2, respectively, she predicts flat-screen Value (as sustainable prices) with an R2 of 97.0% and a P-Value of 4.85E-32.  She accounts for other features as needed. All multi-attribute markets have similar “lost dimensions.” #markets #innovation #hypernomics #prices #dimensions #wsu
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