[128401] in North American Network Operators' Group
Re: off-topic: historical query concerning the Internet bubble
daemon@ATHENA.MIT.EDU (Patrick W. Gilmore)
Thu Aug 5 17:00:37 2010
From: "Patrick W. Gilmore" <patrick@ianai.net>
In-Reply-To: <alpine.LFD.2.00.1008051334180.18234@vinh511.math.umn.edu>
Date: Thu, 5 Aug 2010 17:00:06 -0400
To: NANOG list <nanog@nanog.org>
Errors-To: nanog-bounces+nanog.discuss=bloom-picayune.mit.edu@nanog.org
Ask on the Internet History list.
<http://www.postel.org/internet-history/>
Although, as someone active in 2000, I can tell you that traffic did not =
grow 12.55 times per year (doubling every 100 days), or anything even =
close to that.
--=20
TTFN,
patrick
On Aug 5, 2010, at 2:38 PM, Andrew Odlyzko wrote:
> Apologies for intruding with this question, but I can't think
> of any group that might have more concrete information relevant
> to my current research.
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> Enclosed below is an announcement of a paper on technology bubbles.
> It is based largely on the Internet bubble of a decade ago, and
> concentrates on the "Internet traffic doubling every 100 days" tale.
> As the paper shows, this myth was perceived in very different ways
> by different people, and this by itself helps undermine the =
foundations
> of much of modern economics and economic policy making.
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> To get a better understanding of the dynamics of that bubble, to =
assist
> in the preparation of a book about that incident, I am soliciting =
information from anyone who was active in telecom during that period. I =
would particularly like to know what you and your colleagues estimated =
Internet traffic growth to be, and what your reaction was to the =
O'Dell/Sidgmore/WorldCom/UUNet myth. If you were involved in the =
industry,
> and never heard of it, that would be extremely useful to know, too.
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> Ideally, I would like concrete information, backed up by dates, and =
possibly
> even emails, and a permission to quote this information. However, I =
will
> settle for more informal comments, and promise confidentiality to =
anyone
> who requests it.
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> Andrew Odlyzko
> odlyzko@umn.edu
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> http://www.dtc.umn.edu/~odlyzko/doc/mania03.pdf
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> Bubbles, gullibility, and other challenges for economics,
> psychology, sociology, and information sciences
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> Andrew Odlyzko
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> School of Mathematics
> and Digital Technology Center
> University of Minnesota
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> odlyzko@umn.edu
> http://www.dtc.umn.edu/~odlyzko
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> Preliminary version, August 5, 2010
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> ABSTRACT
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> Gullibility is the principal cause of bubbles. Investors and the =
general public get snared by a "beautiful illusion" and throw caution to =
the wind. Attempts to identify and control bubbles are complicated by =
the fact that the authorities who might naturally be expected to take =
action have often (especially in recent years) been among the most =
gullible, and were cheerleaders for the exuberant behavior. Hence what =
is needed is an objective measure of gullibility.
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> This paper argues that it should be possible to develop such a =
measure. Examples demonstrate, contrary to the efficient market dogma, =
that in some manias, even top-level business and technology leaders do =
fall prey to collective hallucinations and become irrational in =
objective terms. During the Internet bubble, for example, large classes =
of them first became unable to comprehend compound interest, and then =
lost even the ability to do simple arithmetic, to the point of not being =
able to distinguish 2 from 10. This phenomenon, together with advances =
in analysis of social networks and related areas, points to possible =
ways to develop objective and quantitative tools for measuring =
gullibility and other aspects of human behavior implicated in bubbles. =
It cannot be expected to infallibly detect all destructive bubbles, and =
may trigger false alarms, but it ought to alert observers to periods =
where collective investment behavior is becoming irrational.
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> The proposed gullibility index might help in developing realistic =
economic models. It should also assist in illuminating and guiding =
decision making.
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> =
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> If you would like to be on the mailing list for notifications of =
future
> papers on technology bubbles, please send me a note at odlyzko@umn.edu
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> The previous three papers in this series are available at:
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> 1. Collective hallucinations and inefficient markets: The British =
Railway Mania of the 1840s
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> http://www.dtc.umn.edu/~odlyzko/doc/hallucinations.pdf
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> 2. This time is different: An example of a giant, wildly speculative, =
and successful investment mania, B.E. Journal of Economic Analysis & =
Policy, vol. 10, issue 1, 2010, article 60 (registration required)
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> http://www.bepress.com/bejeap/vol10/iss1/art60
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> preprint available at:
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> http://www.dtc.umn.edu/~odlyzko/doc/mania01.pdf
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> 3. The collapse of the Railway Mania, the development of capital =
markets, and Robert Lucas Nash, a forgotten pioneer of accounting and =
financial analysis
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> http://www.dtc.umn.edu/~odlyzko/doc/mania02.pdf
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> =
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> Source materials for the Railway Mania and the Internet bubble are =
available
> at the web pages
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> http://www.dtc.umn.edu/~odlyzko/rrsources/
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> and
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> http://www.dtc.umn.edu/~odlyzko/isources/
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