SFI News:

Models.Behaving.Badly: On Theories, Models, Intuition and Finance

By Emanuel Derman
Columbia University

Thursday, Aug. 23 • 12:15 p.m. • Medium Conference Room

Abstract: Models are metaphors that explain the world we don’t understand in terms of worlds we do.

They are merely analogies, provide partial insight, stand on someone else’s feet.

Theories stand on their own feet, and rely on no analogies.

Models tell you what something is more or less like; theories try to tell you what something is.

Financial models are not theories; they are analogies, idealizations that always sweep dirt under the rug, and good models and good modelers have an obligation to make the dirt explicit.

Note: We are unable to accommodate members of the public for SFI’s limited lunch service; you’re welcome to bring your own.

SFI Host: Chris Wood

http://www.santafe.edu/gevent/detail/science/1102/

The Santa Fe Institute‘s mission is to foster a transdisciplinary research community that endeavors to expand the boundaries of scientific understanding.

Its aim is to discover and comprehend the common fundamental principles in physical, computational, biological, and social systems that underlie many of the most profound problems facing science and society today.