off-topic: historical query concerning the Internet bubble

Patrick W. Gilmore patrick at ianai.net
Thu Aug 5 16:00:06 CDT 2010


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.

-- 
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.
> 
> 
> 
> 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.
> 
> 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.
> 
> 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.
> 
> Andrew Odlyzko
> odlyzko at umn.edu
> 
> 
> 
> 
> 	     http://www.dtc.umn.edu/~odlyzko/doc/mania03.pdf
> 
> 
>          Bubbles, gullibility, and other challenges for economics,
>             psychology, sociology, and information sciences
> 
>                            Andrew Odlyzko
> 
>                        School of Mathematics
>                    and Digital Technology Center
>                       University of Minnesota
> 
>                            odlyzko at umn.edu
>                    http://www.dtc.umn.edu/~odlyzko
> 
>                  Preliminary version, August 5, 2010
> 
> 
>                             ABSTRACT
> 
>   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.
> 
>   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.
> 
>   The proposed gullibility index might help in developing realistic economic models.  It should also assist in illuminating and guiding decision making.
> 
> 
> 
> -----------------------------------------------------------------------------
> 
> 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 at umn.edu
> 
> 
> The previous three papers in this series are available at:
> 
> 1.  Collective hallucinations and inefficient markets: The British Railway Mania of the 1840s
> 
> 	http://www.dtc.umn.edu/~odlyzko/doc/hallucinations.pdf
> 
> 
> 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)
> 
> 	http://www.bepress.com/bejeap/vol10/iss1/art60
> 
>   preprint available at:
> 
>        http://www.dtc.umn.edu/~odlyzko/doc/mania01.pdf
> 
> 
> 3.  The collapse of the Railway Mania, the development of capital markets, and Robert Lucas Nash, a forgotten pioneer of accounting and financial analysis
> 
> 	http://www.dtc.umn.edu/~odlyzko/doc/mania02.pdf
> 
> -----------------------------------------------------------------------------
> 
> Source materials for the Railway Mania and the Internet bubble are available
> at the web pages
> 
>     	http://www.dtc.umn.edu/~odlyzko/rrsources/
> 
> and
> 
> 	http://www.dtc.umn.edu/~odlyzko/isources/
> 
> 
> 





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