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Response to Johnson: A random sample versus the radical event

Published online by Cambridge University Press:  09 November 2023

Elie Ayache
Elie Ayache*
Affiliation:
ITO 33, France
*
Corresponding author: Elie Ayache, ITO 33, 36 rue Lacépède, 75005 Paris, France. Email: [email protected]
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Abstract

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Timothy Johnson's working hypothesis in his review of my latest book, The Medium of Contingency, is that I (as well as the ‘quants’ involved in the derivative pricing industry) do not understand the foundations of abstract probability theory. In this response, I show that this is not the case. On the contrary, rules and protocols which are common in the derivative pricing industry, the result of which can be an extension of abstract probability theory as it now stands, seem to elude Johnson. To address these failings, I provide theoretical reflections on probability theory and its formalisms.

Keywords

Abstract probability theoryrandom samplerandom variablecontingencyderivatives market
Type
Review forum
Information
Finance and Society , Volume 2 , Issue 2: Art and finance , 2016 , pp. 205 - 216
Creative Commons
Creative Common License - CCCreative Common License - BYCreative Common License - NCCreative Common License - ND
This is an Open Access article, distributed under the terms of the Creative Commons Attribution-NonCommercial-No Derivatives licence (http://creativecommons.org/licenses/by-nc-nd/4.0/), which permits noncommercial re-use, distribution, and reproduction in any medium, provided the original work is unaltered and is properly cited. The written permission of Cambridge University Press must be obtained for commercial re-use or in order to create a derivative work.
Copyright
© 2016 The Author(s)

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