Goldilocks, Neutron Stars, and Complete Markets (and Dentistry)

A theoretical physicist friend of mine is very excited to start a new project. (from what I can understand) It's new theoretical model of neutron stars.

Why neutron stars? Apparently it's because white dwarfs are not dense enough, and black holes are too dense.

My most recent "project," (making very loose use of the word project) involved a Robinson Caruso (sp) economy with complete markets. That is, I tried to study an economy of one immortal guy living alone on an island and has access to markets which can let him trade contingent claims on any possible future resolution of all uncertainty that is relevant to him. Oh, and this Robinson Caruso is both immortal and meticulously uses probability theory to make decisions.

I suppose I did this because having Robinson live for only one date is won't capture enough dynamics of the economy, and having two people on that island, incomplete markets, and anything else would make this, um, too, hard.

I should probably add to this description of theory nerds by saying that, I think, we both are trying to study a bigger question. For my friend, it's (I think) how does nuclear matter behave. For me, it's how do financial markets work.

But neutron stars actually exist. They'll let you test your theory. I suppose even if economists could get data from robinson caruso economies that let them test their theories, I'd have significant doubts that those theories can be applied to our economy.

And to make things more realistic, we'll need to get (even more) esoteric. So much for dentistry.