Re:Ask HN: What are some problems solved in unrelated domains?
by brockwhittaker on Monday October 19, 2020 @01:39PM
(#24828747)
> One of those things that perhaps it would have been better that they had not invented.
I think you're off base on this. The ensuing financial mishaps just made the model better, but the creation of Black-Scholes brought us from 0% to 90% of the way to where we are today, where modern derivatives insure product price swings for almost everything across the world. Since then, a patch-work of model changes have brought us closer to perfect pricing through the realization that many markets have higher kurtosis.
I think you're off base on this. The ensuing financial mishaps just made the model better, but the creation of Black-Scholes brought us from 0% to 90% of the way to where we are today, where modern derivatives insure product price swings for almost everything across the world. Since then, a patch-work of model changes have brought us closer to perfect pricing through the realization that many markets have higher kurtosis.