Models.Behaving.Badly.: Why Confusing Illusion with Reality Can Lead to Disaster, on Wall Street and in Life ePub (Adobe DRM) download by Emanuel Derman

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

eBookMall Preferred Publisher
Free Press
Publication date: October 2011
ISBN: 9781439165010
Digital Book format: ePub (Adobe DRM)

Buy ePub

List price:
$12.99
Our price:
$11.66

You save: $1.33 (10%)
GET THIS EBOOK
FOR FREE!
Join our Facebook sweepstake, share and
get 10 likes. Winners
get notified in 24H!
Emanuel Derman was a quantitative analyst (Quant) at Goldman Sachs, one of the financial engineers whose mathematical models usurped traders' intuition on Wall Street. The reliance traders put on such quantitative analysis was catastrophic for the economy, setting off the series of financial crises that began to erupt in 2007 with the mortgage crisis and from which we're still recovering. Here Derman looks at why people--bankers in particular--still put so much faith in these models, and why it's a terrible mistake to do so.Though financial models imitate the style of physics by using the language of mathematics, ultimately they deal with human beings. Their similarity confuses the fundamental difference between the aims and possible achievements of the phsyics world and that of the financial world. When we make a model involving human beings, we are trying to force the ugly stepsister's foot into Cinderella's pretty glass slipper. It doesn't fit without cutting off some of the essential parts. Physicists and economists have been too enthusiastic to recognize the limits of their equations in the sphere of human behavior--which of course is what economics is all about. Models.Behaving.Badly includes a personal account Derman's childhood encounter with failed models--the utopia of the kibbutz, his experience as a physicist on Wall Street, and a look at the models quants generated: the benefits they brought and the problems they caused. Derman takes a close look at what a model is, and then he highlights the differences between the success of modeling in physics and its relative failure in economics. Describing the collapse of the subprime mortgage CDO market in 2007, Derman urges us to stop relying on these models where possible, and offers suggestions for mending these models where they might still do some good. This is a fascinating, lyrical, and very human look behind the curtain at the intersection between mathematics and human nature.
Please sign in to review this product.
Devices:
Models.Behaving.Badly. ePub (Adobe DRM) can be read on any device that can open ePub (Adobe DRM) files.

File Size:
20308 Kb
Language:
ENG
Copy From Text:
Enabled and unlimited.
Printing:
Enabled and unlimited.
Other books by Emanuel Derman
My Life as a Quant: Reflections on Physics and Finance ePub (Adobe DRM) download by Emanuel Derman
My Life as a Quant: Reflections on Physics and Finance
Emanuel Derman
Wiley, June 2012
ISBN: 9780470192733
Format: ePub
Our price: $11.99
My Life as a Quant: Reflections on Physics and Finance PDF (Adobe DRM) download by Emanuel Derman
My Life as a Quant: Reflections on Physics and Finance
Emanuel Derman
John Wiley & Sons, Inc., October 2004
ISBN: 9780471394204
Format: PDF
Our price: $11.99