Wednesday, October 30, 2013

Using Chaos Theory to Predict and Prevent Catastrophic 'Dragon King' Events - Wired Science

Using Chaos Theory to Predict and Prevent Catastrophic 'Dragon King' Events - Wired Science:

"Dragon king events may be freakish, but they are not freakishly rare. In fact they occur much more frequently than you would expect. Small fluctuations in the stock market happen all the time and very large ones rarely. But a dragon-king-type stock market drop would be one that was both extremely large and occurred somewhat regularly. It would be like seeing a once-in-a-century stock market crash every decade or so."

The dragon is an unusual animal as if the wealth of a king.  These outliers may be explained by the particular circumstances in chaotic systems that cause occasional, unusual activity.

"Even more interestingly, the researchers found that dragon king events displayed characteristic signals announcing their approach (they could only occur when the two circuits were on the “body” of the strange attractor butterfly). Knowing that a dragon king was coming, they could apply tiny perturbations to make sure the circuits stayed in sync. In essence, they could forecast the arrival of a catastrophic event and suppress it, prevent it from occurring".

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