Sunday, November 1, 2020

Review of Models.Behaving.Badly.: Why Confusing Illusion with Reality Can Lead to Disaster, on Wall Street and in Life by Emanuel Derman

This review was written by Eugene Kernes

Book can be found in:
Intriguing Connections: 1) Learning Economics: Basic to Advanced

Elaborate Description

The difference between theory and models are vast. Theory expounds an idea that is or is close to exact reality. Models tries to mimic reality but being like reality in not reality. Theories are unconditional, reactions that happen no matter the environment. Models are conditional based on circumstances. If a theory is good, it becomes fact which is why all facts are already theories. Confusing theory and models creates problems in reality and make it harder to learn from them. The author has great prose in explaining the difference using philosophy, religion, physics, and finance. The minor setback of the book is that sometimes the author takes a very long winding pass to get to the point of the explanation, and at times needs a bit more space to explain something in greater depth.

Book Details

Edition ISBN:  9781439164983
Pages to read:  201
Publication:     2012
Format:            Paperback

Ratings out of 5:
Readability     5
Content           5
Overall           5