Incorporating Human Behavior Into Wall Street Mathematical Models 300
After watching the stock market struggle for the past year, financial experts from Wall Street and academia are putting more effort into bringing behavioral modeling into their complex financial calculations. "The risk models proved myopic, they say, because they were too simple-minded. They focused mainly on figures like the expected returns and the default risk of financial instruments. What they didn't sufficiently take into account was human behavior, specifically the potential for widespread panic." Analysts are looking at research from other fields to supplement the hard mathematics of risk assessment. "Financial markets, like online communities, are social networks. Researchers are looking at whether the mechanisms and models being developed to explore collective behavior on the Web can be applied to financial markets." Another avenue they're exploring is how we react to the spread of disease. Jon M. Kleinberg, a computer scientist at Cornell, said, "The hope is to take this understanding of contagion and use it as a perspective on how rapid changes of behavior can spread through complex networks at work in financial markets."
Such as? (Score:5, Funny)
Incorporating Human Behavior Into Wall Street Mathematical Models
What? Like morality?
Re:I foresee... (Score:2, Funny)
A predictive model of human behavior? Sure. If I recall, Harvard Law states that under carefully controlled conditions, human beings will do what they damn well please.
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Read "Terrifying Vindication" at http://klurgsheld.wordpress.com/ [wordpress.com]
Wow! Did Captain Obvious just fly in? (Score:2, Funny)
They're just *now* trying this?
.
Seriously?
Financial calculations (Score:2, Funny)
bringing behavioral modeling into their complex financial calculations.
Am I the only one who read that as 'fictional calculations'? It may be more appropriate ...
Foundation pulling strings? (Score:5, Funny)
Mark my words, there's some guy named Hari Seldon to blame for this....