Rethinking Risks: Gaussian Processes and Behavioral Economics

This chapter examines the intricacies of Gaussian processes in relation to human height and financial markets, contrasting extreme deviations in both fields. It discusses the significance of tail risks, the unpredictability of market behavior, and the challenges posed to traditional economic theories by behavioral insights. Throughout, the speakers reflect on their personal journeys and the evolution of their understanding, particularly how biases and decision-making complexities influence financial strategies and models.