I think as long as the speaker does not right each step specially in mathematical statement, the user can not follow what he says and the flow. Every speaker must write. Otherwise he is lazy.

The model proposed by Sornette on positive feedbacks and referenced in http://arxiv.org/PS_cache/arxiv/pdf/0... was not of a “Sornette and students” origin as stated by the lecturer.

The original model and the economic theoretical proposal that sustained the rule, including the idea that imitation may be rational, rather than a deviation to rationality, came from Gonçalves, see the following reference:

http://ccl.northwestern.edu/netlogo/m...

Sornette was way off, thinking that the phase transitions, to an organized state, should be slow, and that the herding was irrational (per noise trader model).

What Sornette and Zhou did do, was propose an extension to Gonçalves’ rule, and call it self-fulfilling Ising model (a name which IMO does not capture the main aspects of the above artificial financial market), solving a problem with the bimodal distribution (as reported by Sornette and Zhou), another solution to that problem was obtained by Gonçalves through the inclusion of other investor species like trend followers and speculators, following Farmer’s previous work:

http://ccl.northwestern.edu/netlogo/m...

Sornette seems to be assuming credit, for a whole conceptual network on endogenous economic dynamics that has been around for a while. Specifically, Gonçalves' proposal is conceptually linked to Farmer's proposal, Vaga's proposal, Simon's proposal, etc..

It is not at all the case that the financial literature hasn't addressed, before Sornette, many of the issues that Sornette is now addressing regarding endogenous price fluctuations, see the work developed at the SFI, and the work of the economic chaologists.
Sornette should really do his homework and reference properly the literature that has come before him, his work is not an island, nor does it stand alone without a bulk of intellectual production within economics and financial economics that has been around for a while now (for at least twenty years actually (twenty years is a lot of research!)).

As a final note, as far as I read both the works of Sornette and the works of Gonçalves as well as the works that have since been developed on the artificial financial market Netlogo models, by research teams other than Sornette’s, there is a failure by Sornette and Zhou in understanding several of the fundamental aspects of these models, in part, stemming from a failure to understand the concept of rationality.

COMPLEMENTARY LOGISTIC SOLUTION TO THE CRISIS
Beside the TRILLIONS committed for all the multiple rescue plans, a necessary complementary strategic & logistic intervention become imperative to put some order in this crisis of total financial anarchy at all stages. We are all aware now that most figures and values, are unreliable, uncertain, and at best unmeasurable……….
HOW CAN ANYONE TRUST, EVALUATE, ASSESS, UNDERSTAND, ANALYSE, CONTROL, MANAGE, AUDIT, REGULATE, RATE OR RESCUE IN THIS CHAOTIC ENVIRONMENT???

Urgently required a new modern technologically advanced open Decision making Process of Management Information System (MIS) with live monitoring smart GRID +NETWORK supported by Multiplatform system with Multidimensional TOOLS to accurately reflect permanent live REALITIES.

MAURICE

As a geology expert Sornette learned that quake prediction was similar to stock market prediction. Mandelbrot noted similarities in "statistics of extreme values" or fractal geometry or chaos theory for PHYSICAL processes, turbulence in ocean streams and cotton prices They all agree that the older efficient market models missed some long term memory effects, autocorrelation as some say, or in short term "herding" rather than independent data, and that any power law time series is unsustainable LONG TERM, thus bubbles are inevitable but unpredictable in detail. Many books and PhD theses on these economic and financial pricing models (and quake prediction). The problem is that ADVISORS selling IRA's use a much MILDER risk metric than that which would be predicted from the price variation distribution with FATTER TAILS than the normal bell curve. Sadly.