Complexity, Risk, and Financial Markets: Understanding Risk and Financial Crisis with Complexity Theory: 71 (Wiley Investment) - Hardcover

Peters, Edgar E.

Hardcover

ISBN 10: 047123947X ISBN 13: 9780471239475

Publisher: Wiley, 1999

Synopsis

A groundbreaking look at complexity theory and its implications in the world of finance Complexity theory tells us that processes with a large number of seemingly independent agents-such as free markets-can spontaneously organize themselves into a coherent system. In this fascinating book, Edgar Peters brings together scientific theory, the artistic process, and economics to show how the randomness and uncertainty of complexity theory can be applied to financial markets. Written in an engaging and accessible style, this is a thoughtful, conceptual look at the way free markets are, by their nature, continually evolving complex systems. Expanding on previous explorations of chaos theory, Peters draws on real-life examples ranging from the Asian crisis to America's love of conspiracy to show that complexity and randomness are necessary for the free markets to operate in a competitive manner.

About this title

Review

Edgar E. Peters's latest book, Patterns in the Dark: Understanding Risk and Financial Crisis with Complexity Theory is not merely an autobiographical indulgence. The bulk of the book is Peters's lucent analysis expounding on the need for uncertainty. Whether he uses the example of genetic algorithms to show how randomness can lead a process to a goal even when the ultimate path is unknown, or if he simply shows how David Bowie's creation of Ziggie Stardust illustrates the integration of two seemingly contrary elements in the creative process (with a nod toward uncertainty as a requirement for stability), Peters's always seems to provide compelling insight into how global structure and local randomness interact.

Edgar E. Peters's latest book, Patterns in the Dark: Understanding Risk and Financial Crisis with Complexity Theory is not merely an autobiographical indulgence. The bulk of the book is Peters's lucent analysis expounding on the need for uncertainty. Whether he uses the example of genetic algorithms to show how randomness can lead a process to a goal even when the ultimate path is unknown, or if he simply shows how David Bowie's creation of Ziggie Stardust illustrates the integration of two seemingly contrary elements in the creative process (with a nod toward uncertainty as a requirement for stability), Peters's always seems to provide compelling insight into how global structure and local randomness interact.

Ultimately, the book's implications for "global structure" policymakers are more clear than any prescriptions that might be handed down to individual investors acting in an environment of local randomness. However, 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.--("Fool On The Hill - An Investment Opinion" by Alex Schay - June 1999)

From the Back Cover

Shedding new light on the growing complexity and uncertainty of the global marketplace. Advance Praise for Patterns in the Dark

"A fascinating account of one of today's great paradoxes: the irreducible uncertainty that lies at the heart of social and economic order.

A perfectly efficient market could not possibly work. Uncertainty reduces risk. Ed peters takes our most cherished beliefs, turns them upside down, and convinces us that they're much better that way."
- Ian Stewart, Bestselling author of Does God Play Dice? And regular columnist for Scientific American

Critical Praise for Edgar E. Peters'
Chaos and Order in the Capital Markets
"The bible of market chaologists"

- Business Week

"It ranks among the most provocative financial books of the past few years. Reading this book will provide a generous payback for the time and mental energy expended."
- Financial Analysts Journal

Edition details

• Publisher: Wiley
• Publication date: 1999
• ISBN 10: 047123947X
• ISBN 13: 9780471239475
• Binding: Hardcover
• Language: English
• Edition number: 1
• Number of pages: 240