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- Herausgeber: John Wiley & Sons
- Kategorie: Wissenschaft und neue Technologien
- Sprache: Englisch
You've Never Seen What You've Always Needed to Know - Until Now Invisible forces are at work. They push and shove on everything you buy or sell. They affect every concept you want to take to market, all the suppliers you'll deal with, and every customer you'll ever see. To be successful, you need to understand them. See them in detail in ways not possible with other methods. Hypernomics: Using Hidden Dimensions to Solve Unseen Problems discovers that markets behave according to previously unknown laws set by the buyers and sellers within them. It reveals those rules and how to detect, describe, and deploy them to your advantage. It doesn't change economics so much as reveal it. It's like a microscope looking at pond water, a telescope tilted to the sky, sonar scanning the bottom of the ocean. Hypernomics lets you see into markets in ways you can't with the unaided eye. Sailors never navigate without a map. You shouldn't either, since your ship could wind up on the rocks. Hypernomics gives you the means to create market maps that show you where they have openings and how to fill them by giving customers what they want, don't have, and can afford. It finds their thresholds and limits and responses to every possible feature in any product you can offer. The interactions Hypernomics describes have been with us since the dawn of humanity. Now you can finally see them and enjoy the advantages your competitors do not have. Validated by 13 published papers, multiple awards, a patent, and customers such as NASA, Lockheed Martin, Virgin Galactic, and a restaurant down the street, only Hypernomics gives you the ability to solve problems as varied as * How could a restaurant increase revenue by 25% by rearranging seating? * How do you find, describe, and capitalize on open spaces in your market? * What happens when an NFL player decreases his forty-yard dash time by a quarter of a second? * If you tried to exceed a market's limitations, how could you lose $1B? * How do markets change over time? Know what you need to. Discover Hypernomics.
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Table of Contents
Cover
Table of Contents
Title Page
Copyright
Introduction
CHAPTER 1: A Brief History of Position and Direction
ANCIENT MAPS
GEOGRAPHY BEGINS
MATH AND POSITION PROBLEMS
SUMMARY
VIGNETTE: RESTAURANT MATH
CHAPTER 2: Four‐Dimensional Systems
DOT PLOTS BEGIN
“X” MARKS THE SPOT
MOST MARKETS DON'T ADDRESS COMMODITIES
CARTESIAN SYSTEMS AND NEGATIVITY
GEOGRAPHY IS NEVER NEGATIVE
PLOTTING IN FOUR DIMENSIONS
SUMMARY
CHAPTER 3: Five‐Dimensional Systems
PHYSICAL CHANGES OVER TIME
ECONOMIC CHANGES OVER TIME
SUMMARY
CHAPTER 4: Value
HUMAN TRAITS
WHAT DOES VALUE MEAN IN HYPERNOMICS?
DETERMINING VALUE
THE MARKET AS LABORATORY
SUMMARY
VIGNETTE: THE VALUE OF EXPANDING ONE'S LIMITS
CHAPTER 5: Demand
DEMAND FRONTIERS
AGGREGATE DEMAND
AVERAGE DEMAND
MINIMUM DEMAND
PROXY DEMAND
SUBMARKET, SUB‐SUBMARKET, AND MISSION MARKET DEMAND CURVES
PRODUCT DEMAND CURVES
SUMMARY
A HYPERNOMICS VIGNETTE: THE VALUE OF AND DEMAND FOR MONEY
CHAPTER 6: Price and Quantity Determination
THE GENERAL PROBLEM CALLS FOR SPECIFICS
THE NEOCLASSICAL VIEW: THE LAW OF SUPPLY AND DEMAND
FERROUS BLUNDER: UNIVERSAL CLAIM OF UPWARD‐SLOPING SUPPLY CURVES
THE HYPERNOMICS VIEW: THE LAW OF VALUE AND DEMAND
SUMMARY
CHAPTER 7: Market Mapping and Financial Cat Scans
GOT EGGS?
MARKET MAP BOUNDARIES
FEATURE AND PRICE GAP MAPS
FINANCIAL CAT SCANS
SUMMARY
CHAPTER 8: Aiming and Missing
NEOCLASSICAL AIMING
IMMEDIATE AIMING
IMMEDIATE AIMING IN HYPERNOMICS
ULTIMATE AIMING
ULTIMATE AIMING IN HYPERNOMICS
SUMMARY
CHAPTER 9: N‐Dimensional Systems
COMMON OBJECT 1—PIE
COMMON OBJECT 2—LOGARITHMIC SCALING
COMMON OBJECT 3—ROLODEX
COMMON OBJECT 4—CONCENTRIC CIRCLE
COMMON OBJECT 5—PARALLELOGRAMS (AS IN EXTENDABLE MIRRORS)
STARTING FROM (0,0,0,0…0)
SUMMARY
CHAPTER 10: An Amazon Mining Expedition
SUMMARY
CHAPTER 11: More
VIGNETTE: WHAT DO MARKETS LOOK LIKE TO VIRUSES?
CHAPTER 12: Appendix: Using Hypernomics on Your Own
STATING THE PROBLEM
DATA COLLECTION
DATA ENTRY
DATA MANIPULATION
DATA INTERPRETATION
SUMMARY
VIGNETTE: THE IMPORTANCE OF GOING DEEP INTO THE DATA
CHAPTER 13: Neoclassical Economics and Hypernomics Differences
Glossary
References
INTRODUCTION
CHAPTER 1
CHAPTER 2
CHAPTER 3
CHAPTER 4
CHAPTER 5
CHAPTER 6
CHAPTER 7
CHAPTER 8
CHAPTER 9
CHAPTER 10
CHAPTER 11
CHAPTER 12
Index
End User License Agreement
List of Tables
Chapter 2
TABLE 2.1 The world mass‐produced electric car market in 2011.
TABLE 2.2 Sample business case where operation starts with a loss then break...
TABLE 2.3 This table is a subset of Table 2.1.
Chapter 3
TABLE 3.1 Requirements for four‐dimensional markets.
Chapter 4
TABLE 4.1 The 2013 electric car market changed from 2011.
TABLE 4.2 Ground beef database, January 2012.
Chapter 5
TABLE 5.1 Long‐lived U.S. fighter/bomber/attack aircraft purchases, 1957–202...
Chapter 6
TABLE 6.1 An 80% Learning Curve means as the product quantity doubles (as fr...
Chapter 10
TABLE 10.1 Amazon Best Sellers Rank.
TABLE 10.2 Here is a subset of 15 observations in our database of 50 automob...
List of Illustrations
Chapter 1
FIGURE 1.1 Perhaps the earliest authenticated map in the world is this one d...
FIGURE 1.2 Anaximander's world map, c. 570 BCE.
FIGURE 1.3 Side view of Anaximander's worldview, c. 570 BCE.
FIGURE 1.4 Here is a world map by Eratosthenes, c. 194 BCE. Note the use of ...
FIGURE 1.5 The 2D Cartesian coordinate system.
FIGURE 1.6 The 3D Cartesian coordinate system.
FIGURE 1.7 Usually invisible but always real: there are prevailing wind curr...
FIGURE 1.8 Making the invisible visible: regression analysis finds data tren...
FIGURE 1.9 Alfred Marshall popularized the idea of supply and demand curves ...
FIGURE 1.10 Confederates east, west, and north, Union in the center.
FIGURE 1.11 ATVs have many features; here, we look at two.
FIGURE 1.12 In May 2020, the COVID‐19 pandemic forced our favorite eat‐in an...
FIGURE 1.13 Restaurant visits.
Chapter 2
FIGURE 2.1 Dr. John Snow created this “dot‐map” of the cholera cases in Soho...
FIGURE 2.2 Iron ore market equilibrium.
FIGURE 2.3 Three of the four regions in the two‐dimensional Cartesian coordi...
FIGURE 2.4 Seven of the eight regions in the three‐dimensional Cartesian coo...
FIGURE 2.5 To date, most representations of economic activity take place in ...
FIGURE 2.6 Sample business case where operation starts with a loss then brea...
FIGURE 2.7 Sample business case where operation starts with a loss, then bre...
FIGURE 2.8 A political map of Antarctica. Note that all claims meet at the S...
FIGURE 2.9 The marker for the South Pole had a candy cane stripe and a ball ...
FIGURE 2.10 The birth house of Elvis Presley in Tupelo, Mississippi.
FIGURE 2.11 American expatriate Sheila lives in Australia.
FIGURE 2.12 American expatriate Cristina lives in Argentina.
FIGURE 2.13 Line drawing of Cristina's and Sheila's guesthouse.
FIGURE 2.14 Paper‐mâché model of the Tatra Mountains recreated by Sheila.
FIGURE 2.15 Map of breweries in Andorra and Spain by Cristina.
FIGURE 2.16 As children, the twins decorated their rooms in different ways. ...
FIGURE 2.17 Looking at the twins’ rooms from a different perspective.
FIGURE 2.18 Sheila places spheres atop transparent sticks marking the horsep...
FIGURE 2.19 Cristina places spheres atop transparent sticks marking the quan...
FIGURE 2.20 The twins step back from their parts of the puzzle and notice a ...
FIGURE 2.21 The twins realize they've discovered a four‐dimensional system.
FIGURE 2.22 The twins’ four‐dimensional system looks like their rooms as kid...
FIGURE 2.23 The two rooms in this figure resemble this highlighted portion o...
FIGURE 2.24 Hypernomics uses a left‐hand Value Space matched to a right‐hand...
FIGURE 2.25 This is the four‐dimensional system that governs all economic ac...
FIGURE 2.26 This ancient ruler captures distance in one direction.
FIGURE 2.27 A ruler retains its meaning in any direction.
FIGURE 2.28 A physical four‐dimensional system—each point in the left‐hand V...
FIGURE 2.29 Four‐dimensional market systems retain their information even if...
FIGURE 2.30 The actions of the twin forces are embodied in every one of us t...
Chapter 3
FIGURE 3.1 Unique body in space.
FIGURE 3.2 The Battle of Gettysburg, Day 1.
FIGURE 3.3 The Battle of Gettysburg, Day 2.
FIGURE 3.4 The Battle of Gettysburg, Day 3.
FIGURE 3.5 The horsepower and range combinations for the 2011 electric car m...
FIGURE 3.6 In 2012, some horsepower and range pairs on offer for the electri...
FIGURE 3.7 In 2013, more horsepower and range combinations modifications bec...
FIGURE 3.8 This diagram captures the quantity sold and prices for the 2011 e...
FIGURE 3.9 By 2012, Demand in the electric car market moved.
FIGURE 3.10 The year 2013 saw more changes in the Demand for electric vehicl...
FIGURE 3.11 Markets have movements that mimic the massed formations of armie...
FIGURE 3.12 When we add time to four‐dimensional models, we get five‐dimensi...
Chapter 4
FIGURE 4.1 Women have a distribution of heights.
FIGURE 4.2 Men's heights tend to be taller than women's.
FIGURE 4.3 NBA players' heights tend to be taller than women and men in the ...
FIGURE 4.4 Human heights follow a normal distribution, which creates this be...
FIGURE 4.5 Adding the incremental values of the Figure 4.4 curve forms an
S
‐...
FIGURE 4.6 People willingly pay more for features they like if they can affo...
FIGURE 4.7 If they have the money to pay for it, buyers will pay more for fe...
FIGURE 4.8 Horsepower adds value to electric cars.
FIGURE 4.9 Plotting electric car prices from range by itself is statisticall...
FIGURE 4.10 Using two variables, or features, to describe price offers a bet...
FIGURE 4.11 Here, we compare actual prices on the horizontal axis with predi...
FIGURE 4.12 Prices for freight delivery are a function of at least three var...
FIGURE 4.13 In shooting sports, accuracy is how close a measured value (a sh...
FIGURE 4.14 In this helicopter value analysis example, going from 1 to 5 var...
FIGURE 4.15 Value in ground beef is a function of package size and leanness....
FIGURE 4.16 The underpriced Eclipse 500 bankrupted Eclipse Aviation, losing ...
FIGURE 4.17 Rocky Bleier, in 2017, addressing the Metropolitan Washington‐Ba...
FIGURE 4.18 An NFL wide receiver's Value goes down with age, but up with rec...
FIGURE 4.19 An NFL wide receiver's Value goes up dramatically with added spe...
Chapter 5
FIGURE 5.1 Nature poses frontiers for us. Driving a car east of the barrier ...
FIGURE 5.2 People create their frontiers. In World War I, the Western Front ...
FIGURE 5.3 From 1957 to 2021, the United States purchased more of the less e...
FIGURE 5.4 The darker dots within the lighter dots are the 2021 quantities a...
FIGURE 5.5 Between 1996 and 2021, the Demand Frontier for bomb‐dropping airc...
FIGURE 5.6 Northrop Grumman wanted to sell 132 B‐2 bombers, but was stopped ...
FIGURE 5.7 Aggregate Demand estimates price responsiveness and may be used t...
FIGURE 5.8 The lower‐priced end of this market contains far more revenue tha...
FIGURE 5.9 Average Demand calculations take a line of best fit through all t...
FIGURE 5.10 Minimum Demand examines the least expected number of sales given...
FIGURE 5.11 If we use the S&P 500 daily volume Demand Frontier as a proxy, w...
FIGURE 5.12 Markets may consist of several layers within them.
FIGURE 5.13 The Civil Aircraft submarket has its own Aggregate Demand, Deman...
FIGURE 5.14 The Civil Aircraft Aggregate Demand Curve sums up like curves fr...
FIGURE 5.15 The individual mission markets contribute to the Aggregate Marke...
FIGURE 5.16 Sometimes, a product's Value falls substantially as more of it e...
FIGURE 5.17 Database of the world's major currencies, Part 1 of 3, as of Jul...
FIGURE 5.18 Database of the world's major currencies, Part 2 of 3, as of Jul...
FIGURE 5.19 Database of the world's major currencies, Part 3 of 3, as of Jul...
FIGURE 5.20 Fiat currencies units versus price in U.S. Dollars, July 2019.
FIGURE 5.21 Well find we can estimate a country’s exchange rate to the Unite...
FIGURE 5.22 Well find we can estimate a country’s exchange rate to the Unite...
FIGURE 5.23 The fiat currency value on July 12, 2019, was a function of curr...
FIGURE 5.24 In July 2019, as the prime rate rose, currency value fell.
FIGURE 5.25 In the summer of 2019, cryptocurrencies and fiat currencies had ...
Chapter 6
FIGURE 6.1 The United States experienced a downward trend in average beef pr...
FIGURE 6.2 Neoclassical economists imagine an upward‐sloping supply curve in...
FIGURE 6.3 Neoclassical economists use average prices (the horizontal, flat ...
FIGURE 6.4 Using average prices, Neoclassical economists develop errors char...
FIGURE 6.5 An upward‐sloping supply curve for iron ore reflects the added co...
FIGURE 6.6 A downward‐sloping learning curve reflects that people get more c...
FIGURE 6.7 Decades before the solar industry began, Ford Motor Company demon...
FIGURE 6.8 The B‐2 bomber's value fell faster than its cost. At the 21st uni...
FIGURE 6.9 For some products, their recurring costs are initially higher tha...
FIGURE 6.10 Product value can fall for some time, as girls' apparel did in t...
FIGURE 6.11 Some products are profitable over indefinite periods as long as ...
FIGURE 6.12 The 20 orders Aerion had for its AS in 2014 were in line with th...
FIGURE 6.13 The 93 orders and options Aerion claimed for the AS2 in 2020 wer...
Chapter 7
FIGURE 7.1
Columbus Breaking the Egg
by William Hogarth.
FIGURE 7.2 Columbus made four round trips from Europe to the Americas, each ...
FIGURE 7.3 The Cherokee Outlet, the center shaded parcel below the northern ...
FIGURE 7.4 As the fourth Oklahoma Land Rush began, some good sites, notional...
FIGURE 7.5 A few years after the fourth Oklahoma Land Rush, it was evident t...
FIGURE 7.6 General Aviation aircraft, like this Aviat Husky, includes bush p...
FIGURE 7.7 The General Aviation market has Upper, Outer, Lower, and Minimum ...
FIGURE 7.8 The business aircraft market has open feature space for speed and...
FIGURE 7.9 A similar gap exists for range and cabin height.
FIGURE 7.10 This Demand Plane has a large gap concerning sales price.
FIGURE 7.11 Computer tomography of a human head, from the base of the skull ...
FIGURE 7.12 Financial CAT Scans begin with plotting Demand Points.
FIGURE 7.13 Once we have the Demand Points, we can perform a Demand Analysis...
FIGURE 7.14 With the Demand Analysis complete, we find the middle of a price...
FIGURE 7.15 We bound the Target Price with a pair of Features, here A and B,...
FIGURE 7.16 Using the Value Analysis we completed in advance, we lay in the ...
FIGURE 7.17 Here, we find additional constraints, such as technical, legal, ...
FIGURE 7.18 Now we have a region bounded on the top by the lower of our dema...
FIGURE 7.19 We continue with Financial CAT Scans along the Feature A axis.
FIGURE 7.20 We find a promising section cut here. The vertical Profit Line o...
FIGURE 7.21 ISO‐Value Curves depict where Value Response Curves intersect se...
FIGURE 7.22 More engines add safety. The ISO‐Value Curve for a two‐engine pl...
FIGURE 7.23 A thorough analysis will allow us to fix some features and allow...
Chapter 8
FIGURE 8.1 A neoclassical prediction for oil futures results in a one‐dimens...
FIGURE 8.2 This archer draws on a target directly before her, using immediat...
FIGURE 8.3 A miss yields an error triangle with inaccuracies for both the ve...
FIGURE 8.4 The Allies launched millions of artillery rounds against enemy po...
FIGURE 8.5 A pilot sits in a Caudron G.3 training and reconnaissance plane.
FIGURE 8.6 A smiling pilot sits in a Caudron G.3 after a sortie conducted du...
FIGURE 8.7 World War I Allies want to hit an enemy bridge (1) with an artill...
FIGURE 8.8 An airframe manufacturer wants to make a business jet worth $25 m...
FIGURE 8.9 As prices fall from starting Point 1 to final position 4 due to l...
FIGURE 8.10 The price drop from Point 1 to Point 4 lowers maximum potential ...
FIGURE 8.11 Drew Brees anticipates Larry Fitzgerald's ultimate spot on the f...
FIGURE 8.12 A soccer ball is a region bounded by leather that makes up the o...
FIGURE 8.13 In 2012, the diamond points made up the Demand for the electric ...
FIGURE 8.14 Changes on the Demand Plane reflect across to Value Space. In 20...
Chapter 9
FIGURE 9.1 Pie has a diameter and a depth to it.
FIGURE 9.2 The U.S. CIA estimated the 2014 world GDP to be $78.28 trillion, ...
FIGURE 9.3 At $100 million per mile, a cylinder representing total GDP would...
FIGURE 9.4 Log scaling permits us to take large numbers and make them appear...
FIGURE 9.5 If we have $100 million of GDP per foot and take that Log, the re...
FIGURE 9.6 Rolodex cards store data on a moveable plane—they lose no informa...
FIGURE 9.7 Information in a Rolodex or this poster rack has a 1) Common Axis...
FIGURE 9.8 Upper southern latitudes are a series of concentric circles about...
FIGURE 9.9 Extendable mirrors use pantographs to expand their length from a ...
FIGURE 9.10 All markets, including this one for helicopters, have four axes,...
FIGURE 9.11 If we add another market, this one for ground beef, it, too, has...
FIGURE 9.12 Demand Plane data relates to Value Space only through their comm...
FIGURE 9.13 This Demand Plane rotation about the axis loses no data.
FIGURE 9.14 Extending the rotation still keeps the Demand data intact.
FIGURE 9.15 We still have coherent data with the Demand Plane flat against t...
FIGURE 9.16 If we swing the Demand Planes against their Value Spaces, we can...
FIGURE 9.17 With 180° of arc remaining, we can add two more markets.
FIGURE 9.18 There is a pattern for the number of markets considered and the ...
FIGURE 9.19 The geometries of latitude and longitude change based on positio...
FIGURE 9.20 Here are 10 ordered pairs (as [0,0], [1,1], [1,2], etc.) in a st...
FIGURE 9.21 Changing the Angle of the axes retains the ordered pair informat...
FIGURE 9.22 50˚ Angle.
FIGURE 9.23 30˚ Angle.
FIGURE 9.24 10˚ Angle.
FIGURE 9.25 If we cut our GDP pie column (with a radius of 1) into sections,...
FIGURE 9.26 Changing the Angle changes the market's cut of GDP.
FIGURE 9.27 The Angle is changeable.
FIGURE 9.28 If we cut our GDP pie column into 5 pieces, one for each of the ...
FIGURE 9.29 This is the framework for an N‐dimensional system. Here, we've p...
FIGURE 9.30 Using some of the recent techniques we learned, we swing the Dem...
FIGURE 9.31 We can see how the market pattern works with this figure.
Chapter 10
FIGURE 10.1 Quantities and prices for auto manuals on Amazon.
FIGURE 10.2 Create five bins with four lines and find the total quantity and...
FIGURE 10.3 Find Aggregate Market Demand.
FIGURE 10.4 More money is at the bottom of the automobile manual market than...
FIGURE 10.5 Demand Frontier.
FIGURE 10.6 The BMW 5‐Series Manual for 1989 to 1995 appears overpriced in t...
FIGURE 10.7 There may be some unknown effects accounting for the BMW 5‐Serie...
FIGURE 10.8 A slight price drop increased BMW‐5 Manual sales dramatically.
FIGURE 10.9 We can quantify the increase in revenue in the BMW‐5 Series Manu...
Chapter 11
FIGURE 11.1 Adding one 4D market to another yields a 7D arrangement, as show...
FIGURE 11.2 While the goal of a business is to make money, the objective fun...
Chapter 12
FIGURE 12.1 The S&P 500 has Demand Curves.
FIGURE 12.2 Value analysis of stocks within the S&P 500 allowed the author t...
FIGURE 12.3 Here is a partial list of the new business jets sold from Januar...
FIGURE 12.4 The MEE4D template is the path from Microsoft Excel to MEE4D. It...
FIGURE 12.5 Hypernomics Inc. MEE4D software Model Tab lets users select the ...
FIGURE 12.6 The MEE4D Model Tab does a great deal of work for the program. H...
FIGURE 12.7 The Full Regression Report from MEE4D shows user crucial statist...
FIGURE 12.8 We calculate Aggregate Demand using a series of bins. Here, we c...
FIGURE 12.9 Linear four‐dimensional display of Value and Demand for 2009–201...
FIGURE 12.10 Log‐Log‐Log‐Log four‐dimensional display of Value and Demand fo...
FIGURE 12.11 Demand and Value are always linked, as shown by these “Point‐Li...
FIGURE 12.12 The difference between the actual Price and the one we predicte...
FIGURE 12.13 The other end of the residual table shows us planes that may be...
FIGURE 12.14 The Pilatus PC‐6 specializes in taking off and landing in small...
FIGURE 12.15 Here, we focus on the G650 (observe that we have changed to lin...
FIGURE 12.16 Producers will want to know their Product Demand and Learning C...
FIGURE 12.17 In this case, lowering the Price creates more sales, and the pr...
FIGURE 12.18 In business jets, Price partially depends on the volume of a pl...
FIGURE 12.19 Through 2018, at least three sizeable gaps existed in the marke...
FIGURE 12.20 The Airbus Corporate Jet (ACJ) variant of the A220‐100 found a ...
FIGURE 12.21 The Boeing 737‐800 is one of the company's most successful mode...
FIGURE 12.22 The Tupolev Tu‐204 is a design from the Russian design bureau o...
FIGURE 12.23 The Tupolev Tu‐204 is incredibly safe, but its Boeing 737 equiv...
Chapter 13
FIGURE 13.1 Distinctions between Neoclassical Economics and Hypernomics.
Guide
Introduction
Cover Page
Title Page
Copyright
Table of Contents
Begin Reading
Glossary
References
Index
Wiley End User License Agreement
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Hypernomics
Using Hidden Dimensions to Solve Unseen Problems
DOUG HOWARTH
Copyright © 2024 by John Wiley & Sons, Inc. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
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Introduction
“Man's mind, stretched by a new idea, never goes back to its original dimensions.”
Oliver Wendell Holmes, Jr.
Times were tough. Too many omelets to make. Not enough eggs. So, the woodcutter and his wife hatched a plan. We will abandon the kids deep in the woods, far from home; they schemed aloud, within earshot of the youngsters in the next room. With them, we starve. Without them, we eat. Once they're gone, we will be fine, the parents told themselves.
There was a way around that, the kids figured. They decided we'd get some white pebbles and drop them behind us as we walked into the woods. Then, after we are alone, we will follow them back in the moonlight. In this way, Hansel and Gretel made it back to their home.1
So, what are you to do when you are in uncharted territory? An economic territory, that is.
Do what Hansel and Gretel did.
Plot the dots.
If there were only one sentence to explain this book, that would be it.
Everything else follows from that.
Why Hansel and Gretel wanted to return to a place where they were unwelcome is anyone's guess. But notice what they did in the process. They laid out a trail of high‐contrast dots (the bleached pebbles) that traced the way home. Going in another direction might lead them deeper into the woods or, worse yet, into the paths of mythical animals involved in other incredible fairytales (say, a talking Big Bad Wolf2 since they are Grimm Brothers' characters). Instead, they constructed a plan.
Without the rocks, they had no point of reference. With them, they had a way home.
So, why would you plot the dots or, more precisely, the market dots? In part, you will do it for the same purpose as Hansel and Gretel—so you will not become lost. Beyond that, you will find many more reasons to plot the dots within the framework this book describes for the first time. H & G found their way home, sure. Did they find their optimized way home? They will never know.
You can.
In our observations about market dots, we are not talking about pebbles, rocks, or pieces of the Earth, though we will see many analogies to the Earth's geography. So precisely what kinds of dots are we addressing?
We will look at dots representing value, demand, and cost.
As used in this book, these dots typically relate to goods and services in markets. We'll find that when it comes to economic activity, buyers in markets collectively self‐organize in ways we can discover, portray, analyze, and exploit using dots. Understanding this self‐organization is crucial for buyers, sellers, and new market entrants. We'll also examine other realms in which approaches used here may prove helpful.
Importantly, we will find that doing this shows us the limits markets face, how buyers change their behaviors when prices and features change, and where the competition lies—and where it does not.
Because we need to know where the dots (read that as competitors) are and where they are not, in so doing, we'll be throwing away the hypothetical constructs of what we now call modern or Neoclassical economics in favor of the empirical approaches that Hypernomics employs uniformly.
We will prove that consumers ultimately determine both value and demand. In these systems, we always have left‐hand or green dots for value and opposing right‐hand or red dots for demand, each of equal height, representing different aspects of the same product in linked adjoining realms. We will want to hold them, remove them from the flat of a page, and turn them into spheres. The ones on the right match the ones on the left, and both have the same distance from the base. We have a pair for every product we buy, representing a dual state—with left and right spheres.
Dr. John Snow was one of the first researchers to plot the dots with significant effect. A cholera outbreak besieged the Soho district of London, United Kingdom, where he lived in 1854. Determined to find the source, Dr. Snow plotted the Soho deaths from cholera using dots, one dot to a person. He discovered their locus at the Broad (now Broadwick) Street water pump, which he urged authorities to turn off. They did. The epidemic subsided.
Some have used dots or lines to represent troop movements on the battlefield. Interestingly, battles and markets have many things in common. We will use combat analogies in our study of markets and their changes over time.
However, people have not yet felt much need to plot the dots for their markets.
That changes now, as this book introduces Hypernomics (or Multidimensional Economics [ME]), a discovery about how customers make buying decisions and how those actions work with the producers' costs to provide goods and services.
These market dots representing individual products have deep meaning, both by themselves and taken together. Once analyzed, they reveal the inner workings of every market.
Green or left‐hand dots stand for values, the prices buyers are willing to pay for products based on their features. What you are ready to shell out for a given good or service may differ from what your neighbor will gladly pay or what I will. Given enough dots for values, market patterns emerge as lines, inclined planes, or curved surfaces. Those patterns will reveal how people, in general, value a product, what features they like, and which attributes they want more than others. Overpriced or underpriced new products cause lost profits. Worst cases lead to product failures or bankruptcies.
At the same time and on the other hand, we have customer demand. With our right‐hand dots plotted, we can find demand limits as fuzzy lines that we must identify and the market reactions to them that we will discover we are obliged to know. Producers expecting to sell goods and services far beyond customer‐determined demand limits will find sales lagging below goals.
When we compare the consumers' left‐hand dots for value and the right‐hand dots for demand to producers' costs, as blue dots, we can determine profitability for past projects and predict it for future ones. We can map future outcomes like we plan a camping trip and find the best spots with the fewest neighbors.
We will have lots of dots. We need to have a wide‐open space to hold them all. For that, we will go to the South Pole. We will need Elvis, too. Not the King himself, mind you. Elvis left the building some time ago. Instead, we will retrieve his home, that two‐room place where he was born in Tupelo, a white clapboard shotgun shack, its central wall intersection with one of its outer walls squarely planted over the South Pole. The house will keep us warm and help us plot our dots. We will find that the House of Elvis is analogous to a pair of essential constructs, collectively known as coordinate systems, which allow us to plot items of interest.
Note to self. And to you, too. Let's leave our negativity at home. There are no negative regions here. Hypernomics will not abide by them.
That said, be aware that flexibility is essential for you and the dots within this new type of market analysis. Dots move, and we will need to accommodate and anticipate that.
We'll find that market dots are as fundamental to economic analysis as subatomic particles are to physics or cells are to biology. Just as we can make molecules from disparate elements and build bodies with dividing cells, we can consider the entire global economy in one view—if we plot and analyze enough dots.
The notion of how to account for the position of dots began nearly 400 years ago with the French philosopher and mathematician René Descartes.
Various stories abound about how Descartes came about his Cartesian coordinate systems in the early 1600s. Perhaps the one told most often describes him lying in bed, looking up, watching a fly (a moveable dot!) creep across the ceiling, and wondering how to define its position. Another relates how he went into an abandoned oven and thought about the nature of a location. He came to a pair of new ways to describe a place with mathematical precision relative to a point on a plane or in space. Centered on an origin, with two or three lines at right angles to one another for his two‐dimensional and three‐dimensional systems, we cannot overstate the importance of these arrangements to modern mathematics.
By design, these systems necessarily entertained negative numbers. The notion of negative spaces is crucial in many instances. A bird flying with an airspeed of 20 miles per hour head‐on into a 30‐mile‐per‐hour wind moves negatively at 10 miles per hour relative to a fixed point on the ground. When loaded at sea, boats routinely find a portion of their hulls below the waterline, which Cartesian coordinate systems can describe as negative positions in space (often using the “waterline” as an axis).
By the time Descartes came up with his systems, scientists had long had the notion of front, back, left, right, up, and down to describe physical space. Therefore, his use of orthogonal axes made sense. Physicists, engineers, and mathematicians the world over loved it. No one seriously questions the utility of the Cartesian coordinate systems.
This book certainly does not.
But consider this: Are we, in all instances, bound to them? Are those schemes designed for the physical universe the end‐all for economics?
Do we require negative dimensions?
Must we have right‐angled axes?
It turns out that the answer to all of these questions is “no,” as we will see throughout the following chapters.
Thus, this is a book about economic phenomena across multiple market dimensions. It bridges the fields of microeconomics and macroeconomics, and places them in a single collapsible and expandable worldview. It provides for the exhaustive study of any market or multiple or all markets simultaneously. We begin with four axes to describe any market and add three dimensions for each added market. This construct has no upper limit to the number of axes within it.
These observations about markets necessarily require novel ways to consider them. The most important of these new techniques in Hypernomics: Using Hidden Dimensions to Solve Hidden Problems (hereafter, Hypernomics) involves 1) the Law of Value and Demand, 2) Four‐Dimensional Coordinate System, 3) Five‐Dimensional Coordinate System, and 4) N‐Dimensional Coordinate System. This book addresses all of these concepts.
This book is the first of its kind at the time of its writing. That makes it dissimilar from others you have read about economics and may make this book appear very different from what you think you know. However, the phenomena described herein with these new constructs can trace their existence to the very first markets, which defines this book primarily as discovery rather than invention. It offers new views of transactions that date back to initial exchanges of goods and services between people, and trace through to modern times.
You, the reader, take part in them virtually every day.
Indeed, these trades of money for goods or services define markets. To many, market workings lie deeply embedded in mystery and are hard to discern. Myths abound. Solid facts are hard to find. This book's usefulness lies in its ability to separate economic facts from financial fiction and offer mathematically supportable ways to analyze markets empirically and determine the product features needed to enter given markets in an optimized fashion. Alternatively, given a product in a market, Hypernomics offers ways to enhance its profitability through price changes or feature modifications possibly.
So…what is Hypernomics? It is a new field of study, the name for which comes from:
Hyper‐
pref.
3. Existing in more than three dimensions: hyperspace.
[Greek huper‐, from huper, over, beyond;]3
and
‐nomy
suff.
A system of laws governing or a body of knowledge about a specified field: aeronomy.4
So, combining the suffix and the prefix, we get the singular noun that we call Hypernomics: “the study of forces in four or more dimensions.”
Hypernomics unavoidably varies from standard representations that mimic the material world to do this. If you were to ask them, physicists would tell you that we live in a three‐dimensional physical world. A line or axis describes movement forward and backward, one for right and left and another for up and down, with all axes at right angles or orthogonal. If they consider it, time adds another dimension for physicists, a fourth. This three‐dimensional framework works well for us in many respects. We can build buildings, boats, and aircraft or just about anything else with it and work out trajectories to distant objects. It allows us to solve a variety of mathematical problems.
While three‐dimensional systems well describe physical properties, such arrangements do not do nearly as well with market economics. Physical dimensions bear little resemblance to economic dimensions. Concerning the empirical analysis of financial systems, as we will see through this book, a reasonably detailed analysis of any given market begins with four dimensions. Adding time gives us the fifth dimension. A deeper analysis reveals that other factors still influence demand, value, cost, and critical constraints on these dimensions. While not exhaustive, this book shows many such elements and their effects.
To date, most books on economics have used two dimensions to describe economic behavior. Changes over time have often been added as a third dimension in such analyses, though these studies typically have remained confined to straight and curved lines on a single plane. While usually contained in theoretical constructs, these approaches provide knowledge about various critical economic issues.
On the other hand, there are many questions in economics for which two and three‐dimensional systems do not offer nearly enough flexibility or insight into the elements forcing or constraining their solutions, optimized or otherwise determined. This book directs itself to practical solutions to these real‐world conditions. As these issues are diverse, cross the entire breadth of the world economy, and change over time, the study herein cannot possibly incorporate all the conditions that arise from such analysis. It amounts to a primer on the subject, a first cut. That stated, it offers new and valuable empirical ways to analyze markets to place products with justifiable reasons for success.
We will begin our study in two dimensions, as do many other texts. Then, we will expand our analysis to include three, four, five, and eventually n dimensions. While the limits of this text necessarily force us into two‐dimensional representations of multiple dimensions, we will find that we can easily create a seven‐dimensional model with a three‐dimensional printer, creating physical market models that we can hold in our hands. We will do this not for show or academic exercise, but because this type of study reveals several important classes of analysis not attainable with other frameworks.
You may not have entertained such notions previously. That said, no matter what your background in business, economics, or mathematics is, you have everything at your disposal needed to become fluent with the most salient elements of Hypernomics. There are two significant reasons for this.
First, while this book offers different perspectives, it uses everyday objects you are familiar with to depict them. The most complicated visual frameworks you will encounter look like an extendable mirror, oddly shaped pie, or vertical Rolodex. These structures are the basis of the new coordinate system at the core of Hypernomics. You have undoubtedly seen bed sheets. Imagining sheets suspended over floors is also handy, as they represent the responses from buyers and suppliers alike. Finally, when it comes to visualization, the last distinct element you will need is the ability to imagine lines, which can take on many shapes. We must examine several types of them to represent economic forces adequately.
Second, and more familiarly, this book describes something you already intuitively know—your economic behavior and that of your friends, family, and everyone else. Hypernomics does not address some arcane concepts, such as String Theory, that you do not see yourself affecting in any discernible fashion. Among other elements, it addresses buyers' influence on the prices of goods and services provided to them in markets. As the book repeatedly emphasizes in various ways, markets are not hypothetical institutions you read about in books, magazines, or newspapers. In their most basic sense, markets consist of two groups: sellers and buyers. Have you ever purchased some vegetables? Bought electronics? Subscribed to a wireless service? You likely have made all these purchases at some time in your life. In every case, you helped form the market for the products in question…as a buyer. We will see how you valued the products you purchased and how others in the same markets made their value estimations. Subsequent purchases support sustainable prices in a process known as Value Estimating.
Understanding the worth of products, as revealed empirically through analysis of the markets themselves, is the key to understanding the Law of Value and Demand. The Law of Supply and Demand, about which you may have passing or even detailed knowledge, is, in fact, no “law” at all, as the Law of Value and Demand reveals. This is not to say that more than ample or limited supplies do not affect prices, which they empirically do. Instead, the Law of Value and Demand points out that outside of single‐feature commodities (as, say, pure gold or silver or crude oil of a given grade), the would‐be upward‐sloping supply curves, as shown in many economics books in support of the Law of Supply and Demand, simply do not exist. Many markets have wide ranges of products with varying prices and quantities sold. Because of this, there are no sustainable market equilibriums in which supply curves and demand curves intersect at a single point to derive the quantities sold and price of goods for these markets, as Neo‐Classical Economists would have you believe.
Instead, markets, like your body, manage to keep working through sustainable disequilibria. You can walk if your muscle power can overcome Earth's gravity. Ships move forward if they have more thrust than drag. Helicopters rise skyward when they produce more lift than their weight. In much the same fashion, markets continue to function when producers sell goods or services for more than their costs and if, at the same time, they satisfy their consumers' value propositions consistent with their demand limits.
While long‐standing point solutions for equilibriums for entire markets do not exist, there are special classes of vertical lines for individual products known as Profit Lines. Such lines describe per‐unit profits of given goods or services and two or more of their features, costs, prices, and, in another dimension, their quantities sold.
The determination of Profit Lines turns out to be helpful.
Not having this information leaves market analysis, product formulation, and revenue projections to guesswork, which can be financially dangerous. We will entertain a few instances where such investigations went wanting and show how the producers of the products in question suffered gravely because of it. Sometimes, simple errors cost hundreds of millions to billions of dollars. Indeed, those producers would have instead kept those dollars in their pockets. Hypernomics shows how this is possible.
Even with the best applications of Hypernomics, it is quite possible to miss the most favorable positions in market spaces. You can follow a map and still get off course. However, using it allows you to visualize your destination. With a map in hand and eyes open to see what changes along the way, you have a better chance of getting there.
This dramatic break from conventional thinking often forces a particular organization on this book. In many chapters, a short section addresses the Neoclassical (or modern) Economics view of a specific topic to state the mainstream thinking on the subject to date very briefly. Immediately following this section is the Hypernomics viewpoint on the same subject. While the latter area will necessarily have to entertain some analytic geometry to get specific points across, separate endnotes address these topics more thoroughly, with more detailed mathematics supporting such analyses. Readers pressed for time who want to understand Hypernomics can forgo the details in those endnotes as the text within each chapter introduces the subject. Those who want to dive deeper into the workings of the economy and these new structures to describe them will likely find those endnotes helpful. They allow readers to recreate the results or extrapolate the topic at greater length. Vignettes sprinkled throughout the book show Hypernomics in action.
But enough talking about what we are going to see. Let's look at it.
Let's put some dots under the microscope.
CHAPTER 1A Brief History of Position and Direction
“The day science begins to study non‐physical phenomena, it will make more progress in one decade than in all the previous centuries of existence.”
Nikola Tesla
ANCIENT MAPS
“Here are Dragons” (HC SVNT DRACONES in the original Latin). These are the words of warning on the Lenox Globe (c. 1510) near the eastern coast of Asia. Such admonitions were common during the early Renaissance, as cartographers laced uncharted regions with hippos, lions, and sea monsters on their maps to scare away explorers. The unknown was terrifying. It still is.
Not knowing a safe way to get to the clean water on the Serengeti can get you killed. Every cave dweller knew that. What they needed to know was where the bad routes lay. Survival, then as now, depended on learning how to get from here to there in one piece.
You do not want to die of thirst. Yet, you do not want to have to guess about how to get to a river in the safest fashion, either. If you are on an isolated hike, something as simple as a badly sprained ankle can be fatal. You may need to deal with the good paths, the obstacles, the predators, the people along the way against whom you compete, and those with whom you conduct commerce—all of them to stay alive. What to do? Where to go? How to do it?
Humans have many capabilities brought on by millions of years of evolution. Our ancestors demonstrated our faculty for abstraction in the Serengeti, where researchers found some of the first stone tools, and animal
