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Pandora's Risk – Uncertainty at the Core of Finance - Columbia Scholarship Online
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Pandora's Risk: Uncertainty at the Core of Finance

Kent Osband

Abstract

This text argues that uncertainty is central rather than marginal to finance. Markets don't trade mainly on changes in risk. They trade on changes in beliefs about risk, and in the process, markets unite, stretch, and occasionally defy beliefs. Recognizing this truth would make a world of difference in investing. Belittling uncertainty has created a rift between financial theory and practice and within finance theory itself, misguiding regulation and stoking huge financial imbalances. Sparking a revolution in the mindset of the investment professional, this text recasts the market as a learnin ... More

Keywords: uncertainty, risks, markets, beliefs, finance theory, investment, trading, regulation

Bibliographic Information

Print publication date: 2014 Print ISBN-13: 9780231151733
Published to Columbia Scholarship Online: November 2015 DOI:10.7312/columbia/9780231151733.001.0001

Authors

Affiliations are at time of print publication.

Kent Osband, author