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Gerd Gigerenzer on Gut Feelings

EconTalk

The Importance of Intuition in Finance

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Value at risk is a technique for evaluating the riskiness of a portfolio that led people badly astray during the financial crisis in 2008. It would be a great tool if finance, the world of finance, would be predictable. But the real world of finance is not one of calculable risk. And we have seen that value at risk calculation have not prevented any crisis. We need to have simple methods that are robust.

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