Six Degrees of Idiocy

In both poker and finance, Aaron Brown writes, an individual's strategic idiocy can be quantified and analyzed.

One of the classic works of poker, and risk management, is Herbert Yardley’s 1957 best-seller, The Education of a Poker Player, Including Where and How One Learns to Win.

Yardley is an important transitional figure. 19th century poker was forged in self organized frontier societies such as mining camps, farm settlements and transshipment points. During the first half of the 20th century, it evolved into a game of extraordinary mathematical and psychological subtlety. Yardley learned his poker from a genuine old west gambler with deep 19th century roots. He later applied his talents to codebreaking, running the US efforts during World War I and after. That experience imbues his poker analysis with 20th century applied mathematics and proto-game theory.

Logged-in members can download the article by clicking the link below. To log in or register visit here.

Related Posts

Building Your Wings on the Way Down Ray Bradbury famously defined “living at risk” as jumping off a cliff and building your wings on the way down. Too many financial risk managers wh...
Software Frameworks in Quantitative Finance, Part ... We discuss a number of ongoing efforts when developing customizable software systems and frameworks for problems in Quantitative Finance. In particu...
Teraflops for Games and Derivatives Pricing Financial computing continuously demands higher computing performance, which can no longer be accomplished by simply increasing clock speed. Cluster...
The Alternating Direction Explicit (ADE) Method fo... In this article we apply the ADE method to a number of partial differential equations in option pricing using one-factor models (Black–Scholes, loca...
An Asymptotic FX Option Formula in the Cross Curre... In this article, we introduce analytic approximation formulae for FX options in the Libor market model (LMM). The method to derive the formulae is an ...
Rootless Vol Even if you started out clueless about the volatility σ , given a good enough measuring stick and fast enough hands you ought to be able to measure ...
Forecasting the Yield Curve with S-Plus Methods capable of forecasting the entire yield curve based on a time series extension of the Nelson-Siegel model Nelson and Siegel (1987) were su...
Amaranthus Extermino On September 19, 2006 the hedge fund Amaranth Advisors of Greenwich, Connecticut announced that it had lost $6 billion, about two thirds of the $9...
110606_brown