1. Is the Market Value Algorithm a hypothesis, theory or law?
Definitions: A hypothesis is an educated guess, based on observation. Usually, a hypothesis can be supported or refuted through experimentation or more observation. A hypothesis can be disproven, but not proven to be true.
A scientific theory summarizes a hypothesis or group of hypotheses that have been supported with repeated testing. A theory is valid as long as there is no evidence to dispute it. Therefore, theories can be disproven. Basically, if evidence accumulates to support a hypothesis, then the hypothesis can become accepted as a good explanation of a phenomenon. One definition of a theory is to say it's an accepted hypothesis.
A law generalizes a body of observations. At the time it is made, no exceptions have been found to a law. Scientific laws explain things, but they do not describe them. One way to tell a law and a theory apart is to ask if the description gives you a means to explain 'why'.
In 2009, the Market Value Algorithm is considered to be a law because this algorithm is a group of hypotheses that have been supported with repeated testing in hundreds of markets over the past 25 years and no exceptions to this law have been found. It is also true that why the Market Value Algorithm works has not yet been adequately explained.
2. Do markets that are governed by price disprove the Market Value Algorithm?
Markets that are controlled by price are described by a Market Value Algorithm, e.g.:
Market Value = 0 (TMP Value) + 95 (Economic Value) + 5 (Influence)
However, Market Value Algorithms change with time, which is really the 4th variable. If a new technology is discovered that eliminates the use of a product, a Market Value Algorithm can switch to that of a specialized market, e.g.:
Market Value = 65 (TMP Value) + 20 (Economic Value) + 15 (Influence)
Since the Market Value Algorithm is:
- continually adjusted based on new information,
- a dimensionless metric,
- used to compare all technologies, and
- judged to be true by experienced teams, including the market,
- the Market Value Algorithm is a law that will be difficult to falsify.
The fact that the Market Value Algorithm is continually adjusted whenever new information is brought to the attention of those who created the knowledge blocks might be the explanation of why it has worked to explain all markets that have been tested.
The Market Value System uses the Rank Order Principle to estimate the market shares of players in a market that has reached equilibrium. Since this use of the Rank Order Principle has been supported with repeated testing in hundreds of markets over the past 40 years and no exceptions have been found, this use of the Rank Order Principle is considered to be a law.
The Market Value Algorithm is a law that predicts future Market Value Leaders. When the Market Value Algorithm law is coupled with the Rank Order Principle law, it is possible to predict future market shares.
The 21st century requires a culture advance. Professionals have become accustomed to using the skills that they acquired through education and practice for most, if not all, work. Experiential modeling science makes it possible to use your judgment to create any knowledge block that is required to solve the most complex puzzles. And the Market Value System enables professionals to envision future of market value chains.
Yes, corporate culture must evolve to take advantage of these new innovation tools.