Scaling the Heights of Corporate Greed: Chafkin and Andrew Lo on Risk
Nothing like an article that references the Mount Hood incident to reignite my passion for learning about decision making.
Click Here To Read Andrew Lo & Chafkin’s Article On Descion Making & Corporate Greed
(H/T To Jim @vFinance Professor Blog for finding this)
Introduction (Via Freakonomics Blog)
Gonzales is what leads some individuals to such tragic ends, while others faced with the same circumstances survive?
The answer, which forms the major thesis of Deep Survival, may also be the ultimate explanation for the current financial crisis:
The climbers on Mount Hood were set up for disaster not by their inexperience, but by their experience. It was the quality of their thinking, the idea that they knew, coupled with hidden characteristics of the system they had so often used. The system … was capable of displaying one type of behavior for a long time and then suddenly changing its behavior completely.
Excerpts (Via Freakonomics Blog)
Much of neoclassical economics is based on the assumption that individuals act rationally and that markets fully reflect all available information, i.e., markets are informationally efficient. So powerful and far-reaching are the implications of this hypothesis that we sometimes forget it is meant to be an approximation to a much more complex reality.
Click Here To Read Andrew Lo & Chafkin’s Article On Descion Making & Corporate Greed
