Uncertainty: The Necessary Unknowable Road to Speculation

Daniele D’Alvia ()
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Daniele D’Alvia: Queen Mary University of London

Chapter Chapter 4 in The Speculator of Financial Markets, 2023, pp 119-169 from Palgrave Macmillan

Abstract: Abstract This chapter is devoted to further explore the figure of the speculator from both an epistemological and ontological point of view. Markets are full of risks. This should never worry us though, as risks can and should also be understood as profitable opportunities, especially where we can mitigate against them. But markets are also just as full of uncertainties; unknowns which cannot be quantified as risks, cannot be mitigated against, and which may offer heightened profit opportunities, but which can also spell disaster. The chapter offers a fascinating contemporary overview of risk, uncertainty, and profit by highlighting the importance of a group of thinkers from Galileo Galilei until Pascal and Fermat, Knight and Keynes, and Von Neumann and Thaler who have to enlighten the humankind with the laws of probability, game theory, and behavioural economics. The chapter reminds also of the important lesson of financial history about the role the law plays, or sometimes does not play, in regulating financial markets.

Keywords: Financial regulation; Markets; Profit; Risk; Uncertainty (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-3-031-47901-4_4

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DOI: 10.1007/978-3-031-47901-4_4

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