Complexity, Risk, and Financial Markets. Wiley Investment

  • ID: 2214195
  • Book
  • 240 Pages
  • John Wiley and Sons Ltd
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Praise for complexity, risk, and financial markets

"A fascinating account of one of today′s great paradoxes: the irreducible uncertainty that lies at the heart of social and economic order. Ed Peters takes our most cherished beliefs, turns them upside down, and convinces us that they′re much better that way."– Ian Stewart, author of Does God Play Dice and columnist for Scientific American

"Is it any wonder why smart traders love volatility, while amateurs shun it? It′s because smart traders understand complexity theory. And with the help of Peters′ book, you may too!"– Desmond MacRae, The

"In reading previous contributions to the work of complexity and chaos theory, it′s obvious that the forerunners in these fields have been running too fast for the average reader...Peters knows what he is talking about and has done his homework, which makes this a good starting point for gaining insight into an economic paradigm shift bound to take place...[this book] is the real deal about complexity and chaos."– Thomas Stridsman, Futures Magazine

"...Peters always seems to provide compelling insight into how global structure and local randomness interact...the discussions regarding various process models and their implications for economic activity are worth the price of admission alone. Interested investors ought to check it out."– Alex Schay, The Motley
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Introduction: Life, Risk, and Uncertainty.


Imposing Order: Conspiracies and the Mathematics of Ignorance.

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

Complexity and Time: The Dynamics of 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.


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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)
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