Thomas Bayes's analysis of the mixing of old and new information in the formation of probability estimates. Beginning with Greek mythology, Bernstein shows how cultural ideas about risk and probability evolved through Arab mathematics, the European Enlightenment and Chicago School economics. Throwing himself off a cliff to spite his pursuers, Yun Che is reincarnated as Xiao Che, a recently poisoned teen in another realm. Together with his highly successful predecessor, Capital Ideas The Improbable Origins of Modern Wall Street (The Free Press, New York, 1992), Bernstein has laid out a remarkably insightful and entertaining history of the "science" of finance, including fascinating descriptions of the people who drove the development of modern financial economics. The invention of zero allowed people to calculate using merely 10 symbols: 0, 1, 2, 3, 4, 5, 6, 7, 8 and 9. Mental accounting refers to the tendency to sort decisions into compartments rather than to consider the overall position. As the old man laments the loss of his son, Odysseus is overcome and reveals himself. Nor, for that matter, did the philosophers of the Hebrew Talmud, although they used calculations of odds to determine what was permissible under the law. Against the Gods: the Remarkable Story of Risk by Peter L. Bernstein John Wiley & Sons, 383 pages, $27.95 A review by John Adams, University College London, for the THES, 25.11.96 Who dares wins - and also often loses, as investors in the channel tunnel have been discovering. . "—Business Week"Deserves to be, and surely will be, widely read. —The Economist "[A] challenging book, one that may change forever the way people think about the world." Their gods played dice to decide who would rule the heavens, the seas and the underworld. It searches out the roots of modern finance and provides an interpretation of the history of that "science." Against the Gods is a different beast entirely: a popular history of statistics and probability, or more accurately, of the people who developed statistics and probability, that turns into a discussion of stock market portfolio strategies (not, thankfully, from a self-help … But Bernstein puts the emphasis on winning: … By the end of the book, Bernstein has shown us how interpretations of rational behavior in the presence of risk have changed as the tools to understand decision making have changed. The expected winning in the St. Petersburg game is the infinite series. God Against the Gods focuses on the first stirrings of monotheism in ancient Egypt, traces the losing battle that early Judaism and Christianity fought against polytheism, and focuses on the climax of "the war between God and the gods" during the reigns of two charismatic and visionary Roman emperors -- Constantine, who started the … Akhenaten upset the powerful priests of the god Amon when he replaced all the gods of Egypt with the single god Aten, the sun. I came across this book when I was searching for a book that covers the history of re-insurance industry. But the St. Petersburg paradox, named for the city in which Bernoulli presented his answer, gives a game that real-world gamblers would not pay the actuarial value to play, A fair coin is flipped until a head comes up, at which point the game stops and the gambler receives $2 raised to the power of the number of that flip. 1738 The analysis of risk as a factor shaping decisions emerged from the solution to the St. Petersburg paradox presented by Daniel Bernoulli, whose family of geniuses supports the thesis of Francis Galton's Hereditary Genius, that genius runs in the genes. Latinus begs Turnus to reconsider, but Turnus is resolute. 1733 The development of the normal probability distribution by Abraham de Moivre, a French Protestant transplanted to England who never held a proper academic position. 1900Louis Bachelier's doctoral dissertation, "The Theory of Speculation," laid the foundation for modern finance and provided the underpinnings for modern option pricing models, although it was poorly received by his professors at the Sorbonne. Concrete Examples â Youâll get practical advice illustrated with examples of real-world applications or anecdotes. It's told in separate narratives by different people near the royal family. Against the Gods sets up an ambitious premise and then delivers on it." $27.95. New York: John Wiley , Sons, Inc., 1996. Whatever we select for our library has to excel in one or the other of these two core criteria: Enlightening â Youâll learn things that will inform and improve your decisions. The Hindu numbering system originated in roughly A.D. 500. Hunted for possessing a heaven-defying object, Yun Che is a young man in both that life and the next. Justice, like a terrible storm, is about to break upon them. This book is about how our perception of risk, especially with respect to decisions with financial outcomes, advanced (rather slowly) from … Then, in order to move ahead, they needed numbers. Bernstein's earlier work, Ideas, emphasized the advances emerging from the notion that investors are rational and security markets are efficient It focused on modern portfolio theory and its implications for security prices, and on the development of new instruments, like equity options. The gods have condemned the intruders. Book Review- The Misfortunes of Prosperity, Book Review, The Motley Fool Investment Guide. Comprehensive â Youâll find every aspect of the subject matter covered. Summary and Analysis Book I Summary. Bernstein acquaints us with the many new ways of interpreting and measuring risk, and with the emerging field of behavioral finance, which recognizes and attempts to explain anomalies in finance, examples in which rational explanations fail. Against The Gods Peter Bernstein Recommendations and Reviews. Hot Topic â Youâll find yourself in the middle of a highly debated issue. Your highlights will appear here. From that foundation, Bernstein sets off on a whirlwind tour of the development of modern decision theory. Stated differently, the gambler would calculate the expected winnings and, if pressed, would pay as much as that amount to play the game. In modern economics, one model of rational decision making is the expected utility hypothesis Decisions are made with the goal of maximizing one's expected satisfaction (back to Bernoulli again). While looking into your inquiry, I can see that your Free Trial was successfully activated. It is told in a series of monologues by the various characters. Because the game involves Bernoulli trials (each flip has the same probability of heads, and the results on one flip are independent of the results on previous flips), the binomial distribution (based on Pascal's Triangle) gives the answer. All prefer at least one of these genres, so this book is potentially suitable for them. What we say here about books applies to all formats we cover. *getAbstract is summarizing much more than books. 1964 William Sharpe's extension of Markowitz's insights into an understanding of the role of risk as a factor in determining in security prices, in a paper titled "Capital Asset Prices.". The expected winning, which is the maximum amount a gambler would offer to play the game, is the sum of all the possible payoffs, each multiplied by the probability of its occurrence. This book, written in the 1940s, analyzed human interactions as a source of risk. Against the Gods summary: Against the G.o.ds is an exciting book of mixed genres. Against the Gods chronicles the remarkable intellectual adventure that liberated humanity from oracles and soothsayers by means of the powerful tools of risk management that are available to us today. The second chapter of the book addresses the concept of religion and how it is viewed from different religious bases. If I can assist you further you can contact me at Info@getabstract.com. Business historian Peter L. Bernstein wrote it during the early 1990s, when faith in the power of quantitative models and financial engineering was at … Against the Gods 逆天邪神 Mythical Abode Mountain, Cloud’s End Cliff, the most dangerous of Azure Cloud Continent’s four deadly areas. Just as hated in this life as the previous one, Che must overcome his own … Among other books, he wrote Economist on Wall Street and The Price of Prosperity. Bernoulli's solution introduced risk -- and aversion to risk -- into the language of decision making; it was the first statement of a fundamental axiom of economic theory, that diminishing returns prevail; and it is the foundation of the most widely applied theory of "rational" decision making--that economic agents maximize their expected utility, not their expected wealth. Howard Marks. 1654 The first use of probability analysis by Blaise Pascal, a brilliant mathematician, and Pierre de Fermat, lawyer and mathematics hobbyist, who jointly solved the problem of points. Gods begins with a sweeping proposition Modern thinking began when man abandoned the belief that events are due to the whim of the gods and embraced the notion that we are active, independent agents who can manage risks. Nonetheless, getAbstract finds that this is still one of the best popular introductions to the development of financial science. A God Against the Gods is a 1976 historical novel by political novelist Allen Drury, which chronicles ancient Egyptian Pharaoh Akhenaten's attempt to establish a new religion in Egypt. The concept of zero was one of the most profound innovations in mathematical history. Jove calls a council of the gods on Mount Olympus. This book starts with the birth of Akhenaten and follows the palace intrigue around who really has the power in Egypt. Against the Gods is a classic, a 1996 tour de force by the late Peter Bernstein. We rate each piece of content on a scale of 1â10 with regard to these two core criteria. Insiderâs take â Youâll have the privilege of learning from someone who knows her or his topic inside-out. In the last quarter of Gods, Bernstein focuses on the assumption that human choices are "rational," meaning that they are derived logically from a few axioms. Against The Gods: The Remarkable Story Of Risk, Chapter 2, As easy as I, II, III The period covered in the case included the period 1200 to 1700 AD. Pandareus father of the nightingale. This work is a minor classic of financial literature. Engaging â Youâll read or watch this all the way through the end. He writes in a spare, straightforward style, and manages to convey the essentials of financial theory and the essences of great economists without losing the reader in a maze of equations. 1877 Development of the concept of regression toward the mean, applied to human characteristics by Francis Galton, the snobbish cousin to Charles Darwin, who created the unfortunate pseudo-science of "eugenics.". That would be rational! Eye opening â Youâll be offered highly surprising insights. To know what he means, read the book. In this part of Gods Bernstein tips his hand, telling us that although the assumption of rational behavior is a useful starting point, it describes the real world only up to a point. Cycles of greed, treachery, pride, revenge repeat in a myriad of ways that are predictable and yet compelling to read for those who are looking for a straightforward, well written … This work is a minor classic of financial literature. Innovative â You can expect some truly fresh ideas and insights on brand-new products or trends. THE PASCAL-FERMAT ANSWER TO THE PROBLEM OF POINTS: AN EXAMPLE. . Glossary. I'm still looking for that book (recommendations welcome!). In retrospect, that makes Bernsteinâs evident admiration for those models seem rather touchingly ingenuous. He reminds the gods that he commanded that Italy and Troy should not fight, and asked why they've ignored his orders and what has caused the war. Peter Fortune rationally economizes for the Boston Fed. ; Hardcover $27.95 The thesis of this interesting and provocative book is that modern … Furthermore, he argued, moral utility is subject to diminishing returns Each additional dollar of winnings adds a smaller amount to satisfaction. —Business Week "Deserves to be, and surely will be, widely read." Helpful â Youâll take-away practical advice that will help you get better at what you do. Visionary â Youâll get a glimpse of the future and what it might mean for you. Background â Youâll get contextual knowledge as a frame for informed action or analysis. However, the game stops prematurely, after 6 flips have resulted in four heads. Against the Gods summary: Against the G.o.ds is an exciting book of mixed genres. Business historian Peter L. Bernstein wrote it during the early 1990s, when faith in the power of quantitative models and financial engineering was at its apex, and he tells a heroic story. 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