18 May 2022
Gerd Gigerenzer
Session 5a ‘Homo Heuristics: Decision Making Under Radical Uncertainty’
Speaker: Gerd Gigerenzer; Director of the Harding Center for Risk Literacy, University of Potsdam
“Should risk and uncertainty be differentiated? What is “rational” decision making under uncertainty? In this talk, I will answer “yes” to the first question: the best decision in situations of known risks is not necessarily the best one under uncertainty…”
Gerd Gigerenzer is Director of the Harding Center for Risk Literacy at the University of Potsdam, Director emeritus at the Max Planck Institute for Human Development, and partner of Simply Rational – The Institute for Decisions.
Personal reflections from Patrick Schotanus:
“It is well known that Gerd is a critic of the dual process (or systems) model of thinking, popularised by Daniel Kahneman. I got first exposed to Gerd’s alternative views via his book Gut Feelings: The Intelligence of the Unconscious. It has this beautiful, almost Jungian quote in there: “[M]uch of our mental life is unconscious, based on processes alien to logic: gut [instincts], or intuitions. . . . We sense that the Dow Jones will go up . . . Where do these . . . come from?” I consequently invited Gerd as one of my external advisors of my PhD. We first met at the INET Conference in Berlin in 2012. Apart from sharing his views on the homo heuristicus at the symposium, what is of most interest to the MMH—in the spirit of Frank Knight—is Gerd’s acknowledgement of the distinction between risk and uncertainty.”
Emanuel Derman
Session 5b ‘Ways of Knowing’
Speaker: Emanuel Derman; Professor of Financial Engineering, Columbia University
“Financial Models are mere metaphors, idealisations that always sweep dirt under the rug. Good models and good modellers have an obligation to make the dirt explicit”
The next talk will be led by Emanuel Derman, author of ‘Models Behaving Badly’ and professor of Financial Engineering at Columbia University. Shining a light on the good, the bad and the ugly in the world of financial models; what works and what doesn’t.
Personal Reflections from Patrick Schotanus:
“Emanuel was one of the external advisors to my PhD, which was sponsored by my employer at the time, Aegon Asset Management. I personally met him on a trip to NYC when he was Head of Risk at Prisma Capital Partners (which was co-owned by Aegon, later sold to KKR). We quickly went into a deep-dive, as he was writing his next best-seller Models.Behaving.Badly. While I got exposed to much of Emanuel’s best known work in quantitative finance, for example during my MFE study at UC Berkeley, I have always been most impressed by (and interested in) his more qualitative reflections, exemplified by his commemoration to his colleague and friend, the late Fischer Black, as well as his paper on “intrinsic time”.”
See the full agenda here | Find the pre-symposium material here
