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Scientific Controversy: Who Discovered Financial Fractals?

The February issue of Scientific American presents a cover article by the well-known scientist Benoit Mandelbrot. In "A Multifractal Walk Down Wall Street," Mandelbrot claims to have discovered self-affinity in markets, i.e., the idea that fluctuations at small scales are no different from those at large scales. At Elliott Wave International, we recognize that Mandelbrotís depictions present an aspect of more comprehensive ideas first elucidated by Ralph Nelson Elliott in two books, twelve magazine articles and several dozen essays published from 1938 to 1946, all of which are in print.

At first glance, one might conclude that Mandelbrot simply made an independent announcement half a century after Elliott. However, he is intimately familiar with Elliott and his work, as he penned a brief dismissal of both in his 1997 book, Fractals and Scaling in Finance. We address this dismissal in our detailed discussion below.

There is no question of Mandelbrotís genius and contribution to the science of fractal geometry. However, it is only fair that credit go where it is due. According to James Gleick's book Chaos (pp. 111-112), Mandelbrot over the years has been accused by colleagues of habitually taking credit for far more than he should. We believe that this time, he has assuredly overstepped the bounds of courtesy.

Elliott Wave International is not the only firm to have pointed out this injustice. Scientific American has received a large volume of protest, some of which has been ccíd to our Bulletin Board. The magazine has printed Mandelbrotís response in its June issue, out now.  We reply to his response at the end of our detailed discussion, which follows below.

To make up your own mind, you are welcome to dive into this fascinating question by exploring the rest of this site.

Continue to Mandelbrot's Article

Scientific Controversy Introduction - Mandelbrot's ArticlePrechter's Letter to the Editor - Prechter's Response
Postscript - Mandelbrot's Reply and Prechter's Response - Follow-up Responses - More of the Same Over the Ensuing Decade

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