Models. Behaving. Badly. : Why Confusing Illusion with Reality Can Lead to Disaster, on Wall Street and in Life

Emanuel Derman

ISBN 10: 1439164991 / ISBN 13: 9781439164990

Editore: Free Press Jul 2012, 2012

Riguardo questo articolo

Neuware - Now in paperback, 'a compelling, accessible, and provocative piece of work that forces us to question many of our assumptions' (Gillian Tett, author of Fool's Gold).Quants, physicists working on Wall Street as quantitative analysts, have been widely blamed for triggering financial crises with their complex mathematical models. Their formulas were meant to allow Wall Street to prosper without risk. But in this penetrating insider's look at the recent economic collapse, Emanuel Derman-former head quant at Goldman Sachs-explains the collision between mathematical modeling and economics and what makes financial models so dangerous. Though such models imitate the style of physics and employ the language of mathematics, theories in physics aim for a description of reality-but in finance, models can shoot only for a very limited approximation of reality. Derman uses his firsthand experience in financial theory and practice to explain the complicated tangles that have paralyzed the economy. Models.Behaving.Badly. exposes Wall Street's love affair with models, and shows us why nobody will ever be able to write a model that can encapsulate human behavior.

Codice articolo 9781439164990

Dati bibliografici

• Titolo: Models. Behaving. Badly. : Why Confusing Illusion with Reality Can Lead to Disaster, on Wall Street and in Life
• Editore: Free Press Jul 2012
• Data di pubblicazione: 2012
• Lingua: Inglese
• ISBN 10: 1439164991
• ISBN 13: 9781439164990
• Rilegatura: Taschenbuch
• Condizione: Neu
• Dimensioni: 222 L x 141 A x 18 P (millimetri) 222 millimetri di larghezza per 141 millimetri di altezza per 18 millimetri di profondità
• Peso: 218 grammi

Descrizione articolo

Riassunto

Now in paperback, “a compelling, accessible, and provocative piece of work that forces us to question many of our assumptions” (Gillian Tett, author of Fool’s Gold).

Quants, physicists working on Wall Street as quantitative analysts, have been widely blamed for triggering financial crises with their complex mathematical models. Their formulas were meant to allow Wall Street to prosper without risk. But in this penetrating insider’s look at the recent economic collapse, Emanuel Derman—former head quant at Goldman Sachs—explains the collision between mathematical modeling and economics and what makes financial models so dangerous. Though such models imitate the style of physics and employ the language of mathematics, theories in physics aim for a description of reality—but in finance, models can shoot only for a very limited approximation of reality. Derman uses his firsthand experience in financial theory and practice to explain the complicated tangles that have paralyzed the economy. Models.Behaving.Badly. exposes Wall Street’s love affair with models, and shows us why nobody will ever be able to write a model that can encapsulate human behavior.

Informazioni sull?autore

Emanuel Derman is a professor at Columbia University and Director of the university’s program in financial engineering. Until his retirement in 2002, he spent sixteen years at Goldman Sachs as a quant.