Financial engineering is a multidisciplinary field involving financial theory, methods of engineering, tools of mathematics and the practice of programming. It has also been defined as the application of technical methods, especially from mathematical finance and computational finance, in the practice of finance.
The hypothetico-deductive model or method is a proposed description of the scientific method. According to it, scientific inquiry proceeds by formulating a hypothesis in a form that can be falsifiable, using a test on observable data where the outcome is not yet known. A test outcome that could have and does run contrary to predictions of the hypothesis is taken as a falsification of the hypothesis. A test outcome that could have, but does not run contrary to the hypothesis corroborates the theory. It is then proposed to compare the explanatory value of competing hypotheses by testing how stringently they are corroborated by their predictions.
Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets is a book by Nassim Nicholas Taleb that deals with the fallibility of human knowledge. It was first published in 2001. Updated editions were released a few years later. The book is the first part of Taleb's multi-volume philosophical essay on uncertainty, titled the Incerto, which also includes The Black Swan (2007–2010), The Bed of Procrustes (2010–2016), Antifragile (2012), and Skin in the Game (2018).
Nassim Nicholas Taleb is a Lebanese-American essayist, mathematical statistician, former option trader, risk analyst, and aphorist whose work concerns problems of randomness, probability, and uncertainty.
Biopower is a term which relates to the practice of modern nation states and their regulation of their subjects through "an explosion of numerous and diverse techniques for achieving the subjugations of bodies and the control of populations". It was coined by French social theorist Michel Foucault. Foucault first used the term in his lecture courses at the Collège de France, and the term first appeared in print in The Will to Knowledge, Foucault's first volume of The History of Sexuality. In Foucault's work, it has been used to refer to practices of public health, regulation of heredity, and risk regulation, among many other regulatory mechanisms often linked less directly with literal physical health. It is closely related to a term he uses much less frequently, but which subsequent thinkers have taken up independently, biopolitics, which aligns more closely with the examination of the strategies and mechanisms through which human life processes are managed under regimes of authority over knowledge, power, and the processes of subjectivation.
In economics, Knightian uncertainty is a lack of any quantifiable knowledge about some possible occurrence, as opposed to the presence of quantifiable risk. The concept acknowledges some fundamental degree of ignorance, a limit to knowledge, and an essential unpredictability of future events.
Lebanese Arabic, or simply Lebanese, is a variety of North Levantine Arabic, indigenous to and primarily spoken in Lebanon, with significant linguistic influences borrowed from other Middle Eastern and European languages and is in some ways unique from other varieties of Arabic. Due to multilingualism and pervasive diglossia among Lebanese people, it is not uncommon for Lebanese people to code-switch between or mix Lebanese Arabic, French, and English in their daily speech. It is also spoken among the Lebanese diaspora.
Flâneur is a French term popularized in the nineteenth-century for a type of urban male "stroller", "lounger", "saunterer", or "loafer". The word has some nuanced additional meanings. Traditionally depicted as male, a flâneur is an ambivalent figure of urban affluence and modernity, representing the ability to wander detached from society with no other purpose than to be an acute observer of industrialized, contemporary life. Flânerie is the act of strolling, with all of its accompanying associations. A near-synonym of the noun is boulevardier.
The black swan theory or theory of black swan events is a metaphor that describes an event that comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact with the benefit of hindsight. The term is based on an ancient saying that presumed black swans did not exist, until they were discovered in Australia in 1697, and it then became reinterpreted to mean an unforeseen and consequential event.
The Black Swan: The Impact of the Highly Improbable is a 2007 book by Nassim Nicholas Taleb, who is a former options trader. The book focuses on the extreme impact of rare and unpredictable outlier events—and the human tendency to find simplistic explanations for these events, retrospectively. Taleb calls this the Black Swan theory.
The ludic fallacy, proposed by Nassim Nicholas Taleb in his book The Black Swan (2007), is "the misuse of games to model real-life situations". Taleb explains the fallacy as "basing studies of chance on the narrow world of games and dice". The adjective ludic originates from the Latin noun ludus, meaning "play, game, sport, pastime".
Epistemology or theory of knowledge is the branch of philosophy concerned with the nature and scope (limitations) of knowledge. It addresses the questions "What is knowledge?", "How is knowledge acquired?", "What do people know?", "How do we know what we know?", and "Why do we know what we know?". Much of the debate in this field has focused on analyzing the nature of knowledge and how it relates to similar notions such as truth, belief, and justification. It also deals with the means of production of knowledge, as well as skepticism about different knowledge claims.
In economics and finance, a Taleb distribution is the statistical profile of an investment which normally provides a payoff of small positive returns, while carrying a small but significant risk of catastrophic losses. The term was coined by journalist Martin Wolf and economist John Kay to describe investments with a "high probability of a modest gain and a low probability of huge losses in any period."
The role of chance, or "luck", in science comprises all ways in which unexpected discoveries are made.
Antifragile: Things That Gain From Disorder is a book by Nassim Nicholas Taleb published on November 27, 2012, by Random House in the United States and Penguin in the United Kingdom. This book builds upon ideas from his previous works including Fooled by Randomness (2001), The Black Swan (2007–2010), and The Bed of Procrustes (2010–2016), and is the fourth book in the five-volume philosophical treatise on uncertainty titled Incerto. Some of the ideas are expanded on in Taleb's fifth book Skin in the Game: Hidden Asymmetries in Daily Life (2018).
The Lindy effect is a theorized phenomenon by which the future life expectancy of some non-perishable things, like a technology or an idea, is proportional to their current age. Thus, the Lindy effect proposes the longer a period something has survived to exist or be used in the present, the longer its remaining life expectancy. Longevity implies a resistance to change, obsolescence or competition and greater odds of continued existence into the future. Where the Lindy effect applies, mortality rate decreases with time. Mathematically, the Lindy effect corresponds to lifetimes following a Pareto probability distribution.
Tsundoku (積ん読) is the phenomenon of acquiring reading materials but letting them pile up in one's home without reading them. The term is also used to refer to books ready for reading later when they are on a bookshelf.
Virtue signalling is a pejorative neologism for the expression of a disingenuous moral viewpoint with the intent of communicating good character.
Skin in the Game: Hidden Asymmetries in Daily Life is a 2018 nonfiction book by Nassim Nicholas Taleb, a former options trader with a background in the mathematics of probability and statistics.
An antilibrary is a collection of books that are owned but have not yet been read. The term was coined by Nassim Nicholas Taleb. The concept it describes has been compared to the Japanese tsundoku.
