Economist and Physics


Economist Andrew Lo speaks at MIT about economics and physics.  He talked about ideas that he and physicist Mark T. Mueller came up with as to why financial crisis happens.

It is a timely talk presented in June 2010 after the 2007 to 2009 recession.

He explains the Ellsberg Paradox by introducing to the audience a hypothetical game.

One of the main points of the talk is that financial crisis happens when tools developed are not appropriate for the level of uncertainty and risk involved.