Complexity, Risk, and Financial Markets

Edgar E. Peters (Author)

9780471399810, Wiley

Paperback / softback, published 29 January 2001

256 pages
22.8 x 15.6 x 1.7 cm, 0.333 kg

Peters combines a chaos/complex systems framework with the Austrian school of economic thought to explain our lack of market understanding. He develops a strong case that the most pressing problem for investors is not a matter of specific models but of determining how to assess risk in a complex and uncertain world. Peters draws important distinctions between risk, uncertainty, ignorance, vagueness, and ambiguity, and in doing so, shows how the subtle meanings of words can provide immense value in explaining the market environment. He also resurrects the Austrian school's emphasis on subjectivism and makes it come alive within finance. (Financial Analyst's Journal)

Die Komplexitätstheorie besagt, daß Prozesse mit einer großen Anzahl scheinbar unabhängiger Faktoren, wie z.B. freie Märkte, sich spontan zu einem kohärenten System zusammenschließen können. Auf der Grundlage wissenschaftstheoretischer und wirtschaftswissenschaftlicher Aspekte demonstriert der Autor, wie sich das Zufallsprinzip und die Ungewißheit der Komplexitätstheorie auf die Finanzmärkte anwenden lassen. Verständlich und spannend geschrieben, bietet dieses Buch einen grundlegenden Einblick, wie freie Märkte funktionieren, indem sie ständig neue komplexe Systeme schaffen. Peters untermauert seine Aussagen mit einer Fülle von praktischen Beispielen.

Introduction: Life, Risk, and Uncertainty.

UNCERTAINTY, COMPLEXITY, AND SPONTANEOUS ORGANIZATION.

Imposing Order: Conspiracies and the Mathematics of Ignorance.

Uncertainty, Vagueness, and Ambiguity: The Need for Information.

Complexity and Time: The Dynamics of Uncertainty.

FREE MARKETS AND THE NEED FOR UNCERTAINTY.

Subjectivism: "The Economics of Time and Ignorance."

Diversity and Knowledge.

Crisis and Competition: Creative Destruction in Free Markets.

Economic Evolution: Change in Real Time.

Creativity: Uncertainty, Innovation, and Entrepreneurs.

Rules and Law: Limits in Complexity.

Degrees of Order: Balancing Rules, Freedom, and Uncertainty.

The Need for Uncertainty.

References.

Index.

Subject Areas: Finance & accounting [KF]