By Elie Ayache
In The Medium of Contingency Elie Ayache builds upon his ground-breaking ebook The clean Swan, in exploring the intersection of philosophy and finance, introducing new notions of fee and marketplace. Inverting the got view, he now sees a production of subject in either the marketplace and its metaphysics, instead of natural speculation.
as soon as well-known because the right medium of contingency and disassociated from the probabilistic and statistical instruments generally used to version it, the marketplace may be suggestion as 'real', in a brand new feel of fact resembling the recent experience of topic. To deliver this new and unique viewpoint, The Medium of Contingency builds on likelihood concept as first formalized through von Mises and Kolmogorov, and later revisited by way of Shafer and Vovk. It utilises the author's huge event in derivatives pricing expertise and software program, in addition to his paintings within the philosophy of contingency and contingent claims, to suggest a brand new philosophical interpretation of Brownian movement and of the Black-Scholes-Merton formulation. Then it completes the overturning of the normal view of the industry by way of arguing that there will be no distinction, eventually, among an underlying asset and the spinoff written on it.
This ebook doesn't target to alter the industry however the approach we needs to examine it. it's the author's conviction that there will be no philosophy of the marketplace, and hence no contemplating it, with no philosophy of contingent claims and of spinoff pricing. The e-book presents the lacking piece, which the philosophy of chance can't supply by myself. Its scope, notwithstanding, extends past the stern critique of economic arithmetic, because it additionally, and maybe most significantly, promises the author's definitive therapy of the philosophically sought after and lately a lot mentioned concept of contingency.