Friday, January 28, 2011

Let's play around with my yield curve formula

Warning, this is a work in progress Like this (subject to later corrections!)  I will spend time on this page, it is not complete.  I do what I do, figure this out using the blog as a note taking machine.





This curve computes the yield required for smooth flow of all goods within the channel.  The entire yield curve comprises the yield on n components of one channel, where n appears in the nominator of the exponential. The channel components are quantized by the economic encoder. In Euler terms, this is the power spectrum of all the finite components of the channel spread evenly across the curve.  In relative terms the yield tells us how much inventory has to be growing relative to down stream distribution to minimize the probability of inventories going to zero.

Note, that n are the number of channel components, the number of leafs from the maximum entropy economic encoder.  The number channel components is related to the word length, i, of the cargo size, Q.

What about B, the bandwidth, which we define as the point where the short term end of the curve meets the noise? Look at the original Shannon equation:
 Signal to noise is fixed in our theory, and the:

is k,  represents the extra bandwidth to fit one more bit in the output rate..

However, when bandwidth increases, all things equal, the smallest quant decreases and the curve  shifts to the short end.  Eventually we find new products to fill the channel and  n increases. The maximum Qi, Qmax, the longest chain in the encoder  at the wholesale level, increases.  See, the PSST of Kling comes complete with a constructed yield curve!

The relationship between Qi, the quant size for the ith channel, and n the number of channels. Comes from the encoder function which is finding the maximum entropy rearrangement of cargo over the whole channel. The number of channels cannot exceed kB, the maximum channel capacity. As it approaches that limit the curve goes flat, the yield equals standard SNR over the length.

But. I am still a bit perplexed by it all.

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