arXiv subjects

Craig S Wright

Publications and source records attributed to Craig S Wright.

8 recordsLinked to original sources

arXiv2026

Design-Robust Event-Study Estimation under Staggered Adoption Diagnostics, Sensitivity, and Orthogonalisation

This paper develops a design-first econometric framework for event-study and difference-in-differences estimands under staggered adoption with heterogeneous effects, emphasising (i) exact probability limits for conventional two-way fixed effects event-study regressions, (ii) computable design diagnostics that quantify contamination and negative-weight risk, and (iii) sensitivity-robust inference that remains uniformly valid under restricted violations of parallel trends. The approach is accompanied by orthogonal score constructions that reduce bias from high-dimensional nuisance estimation when conditioning on covariates. Theoretical results and Monte Carlo experiments jointly deliver a self-contained methodology paper suitable for finance and econometrics applications where timing variation is intrinsic to policy, regulation, and market-structure changes.

econ.EM↗

arXiv2026

Utility-Weighted Forecasting and Calibration for Risk-Adjusted Decisions under Trading Frictions

Forecasting accuracy is routinely optimised in financial prediction tasks even though investment and risk-management decisions are executed under transaction costs, market impact, capacity limits, and binding risk constraints. This paper treats forecasting as an econometric input to a constrained decision problem. A predictive distribution induces a decision rule through a utility objective combined with an explicit friction operator consisting of both a cost functional and a feasible-set constraint system. The econometric target becomes minimisation of expected decision loss net of costs rather than minimisation of prediction error. The paper develops a utility-weighted calibration criterion aligned to the decision loss and establishes sufficient conditions under which calibrated predictive distributions weakly dominate uncalibrated alternatives. An empirical study using a pre-committed nested walk-forward protocol on liquid equity index futures confirms the theory: the proposed utility-weighted calibration reduces realised decision loss by over 30\% relative to an uncalibrated baseline ($t$-stat -30.31) for loss differential and improves the Sharpe ratio from -3.62 to -2.29 during a drawdown regime. The mechanism is identified as a structural reduction in the frequency of binding constraints (from 16.0\% to 5.1\%), preventing the "corner solution" failures that characterize overconfident forecasts in high-friction environments.

econ.EM↗

arXiv2025

Cognitive Castes: Artificial Intelligence, Epistemic Stratification, and the Dissolution of Democratic Discourse

Artificial intelligence functions not as an epistemic leveller, but as an accelerant of cognitive stratification, entrenching and formalising informational castes within liberal-democratic societies. Synthesising formal epistemology, political theory, algorithmic architecture, and economic incentive structures, the argument traces how contemporary AI systems selectively amplify the reasoning capacity of individuals equipped with recursive abstraction, symbolic logic, and adversarial interrogation, whilst simultaneously pacifying the cognitively untrained through engagement-optimised interfaces. Fluency replaces rigour, immediacy displaces reflection, and procedural reasoning is eclipsed by reactive suggestion. The result is a technocratic realignment of power: no longer grounded in material capital alone, but in the capacity to navigate, deconstruct, and manipulate systems of epistemic production. Information ceases to be a commons; it becomes the substrate through which consent is manufactured and autonomy subdued. Deliberative democracy collapses not through censorship, but through the erosion of interpretive agency. The proposed response is not technocratic regulation, nor universal access, but the reconstruction of rational autonomy as a civic mandate, codified in education, protected by epistemic rights, and structurally embedded within open cognitive infrastructure.

cs.CY↗

arXiv2025

Mathematical Modelling of Oscillatory Dynamics in Circular Traffic Systems

This paper presents a rigorous analytical model of traffic dynamics on a circular track, demonstrating the emergence of standing oscillations resulting from microscopic driver behaviour, delay responses, and proximity pressure. Without relying on simulation, we derive a series of coupled delay differential equations to model vehicular interactions. By introducing a mnemonic-based symbolic system, we establish a mathematical framework incorporating stochastic initial conditions, non-uniform reaction times, and cognitive lag. A full linear stability analysis is conducted using Fourier decomposition and modal perturbation techniques. Our results identify critical thresholds for harmonic induction, delineate the bounds of safe following distances, and reveal hysteresis in driver overcorrection. The analysis concludes with implications for autonomous vehicle control and potential suppression strategies for oscillatory instability. All derivations are purely symbolic and analytically proven.

nlin.AO↗

arXiv2025

Immutability Does Not Guarantee Trust: A Formal and Logical Refutation

It is frequently claimed in blockchain discourse that immutability guarantees trust. This paper rigorously refutes that assertion. We define immutability as the cryptographic persistence of historical states in an append-only data structure and contrast it with trust, understood as a rational epistemic expectation under uncertainty. Employing predicate logic, automata-theoretic models, and epistemic game-theoretic analysis, we demonstrate that immutability neither entails nor implies correctness, fairness, or credibility. Through formal constructions and counterexamples--including predictive fraud schemes and the phenomenon of garbage permanence--we show that the belief conflates structural and epistemic domains. Immutability preserves all data equally, regardless of veracity. Therefore, the assertion that immutability guarantees trust collapses under the weight of formal scrutiny.

cs.CR↗

arXiv2025

Resolving CAP Through Automata-Theoretic Economic Design: A Unified Mathematical Framework for Real-Time Partition-Tolerant Systems

The CAP theorem asserts a trilemma between consistency, availability, and partition tolerance. This paper introduces a rigorous automata-theoretic and economically grounded framework that reframes the CAP trade-off as a constraint optimization problem. We model distributed systems as partition-aware state machines and embed economic incentive layers to stabilize consensus behavior across adversarially partitioned networks. By incorporating game-theoretic mechanisms into the global transition semantics, we define provable bounds on convergence, liveness, and correctness. Our results demonstrate that availability and consistency can be simultaneously preserved within bounded epsilon margins, effectively extending the classical CAP limits through formal economic control.

cs.GT↗

arXiv2025

Epistemic Scarcity: The Economics of Unresolvable Unknowns

This paper presents a praxeological analysis of artificial intelligence and algorithmic governance, challenging assumptions about the capacity of machine systems to sustain economic and epistemic order. Drawing on Misesian a priori reasoning and Austrian theories of entrepreneurship, we argue that AI systems are incapable of performing the core functions of economic coordination: interpreting ends, discovering means, and communicating subjective value through prices. Where neoclassical and behavioural models treat decisions as optimisation under constraint, we frame them as purposive actions under uncertainty. We critique dominant ethical AI frameworks such as Fairness, Accountability, and Transparency (FAT) as extensions of constructivist rationalism, which conflict with a liberal order grounded in voluntary action and property rights. Attempts to encode moral reasoning in algorithms reflect a misunderstanding of ethics and economics. However complex, AI systems cannot originate norms, interpret institutions, or bear responsibility. They remain opaque, misaligned, and inert. Using the concept of epistemic scarcity, we explore how information abundance degrades truth discernment, enabling both entrepreneurial insight and soft totalitarianism. Our analysis ends with a civilisational claim: the debate over AI concerns the future of human autonomy, institutional evolution, and reasoned choice. The Austrian tradition, focused on action, subjectivity, and spontaneous order, offers the only coherent alternative to rising computational social control.

econ.GN↗

arXiv2025

Safe Low Bandwidth SPV: A Formal Treatment of Simplified Payment Verification Protocols and Security Bounds

This paper presents a complete formal specification, protocol description, and mathematical proof structure for Simplified Payment Verification (SPV) as originally defined in the Bitcoin whitepaper \cite{nakamoto2008}. In stark contrast to the misrepresentations proliferated by popular implementations, we show that SPV is not only secure under bounded adversarial assumptions but strictly optimal for digital cash systems requiring scalable and verifiable transaction inclusion. We reconstruct the SPV protocol from first principles, grounding its verification model in symbolic automata, Merkle membership relations, and chain-of-proof dominance predicates. Through rigorous probabilistic and game-theoretic analysis, we derive the economic bounds within which the protocol operates securely and verify its liveness and safety properties under partial connectivity, hostile relay networks, and adversarial propagation delay. Our specification further introduces low-bandwidth optimisations such as adaptive polling and compressed header synchronisation while preserving correctness. This document serves both as a blueprint for secure SPV implementation and a rebuttal of common misconceptions surrounding non-validating clients.

cs.CR↗