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Physics

How mathematical modelling seduced Wall Street

From apartheid to financial markets, trying to capture messy human behaviour using techniques from science can derail us all

By Emanuel Derman

19 October 2011

New Scientist. Science news and long reads from expert journalists, covering developments in science, technology, health and the environment on the website and the magazine.

(Should we be defending the banks from science? Image: Milos Bicanski/Getty Images)

HOW often are we guilty of a type of naivety both in science and in life by insisting that the things we don’t understand really do fit into the boxes of the things we imagine we do; that the facts fit our models of them?

Take the comments by influential biologist and evangelistic atheist Richard Dawkins in the Los Angeles Times in 2007 about the scientific “vandalism” involved in hanging Saddam Hussein: “[his] mind would have been a unique resource for historical, political and psychological research… Psychologists,…

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