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Symposium 2014

Background Paper - Addressing Financial Uncertainty

The Challenge

We live in an uncertain financial world, in the sense that we do often know neither the probabilities with which conceivable financial events will occur, nor all the possible events that could occur ...

We live in an uncertain financial world, in the sense that we do often know neither the probabilities with which conceivable financial events will occur, nor all the possible events that could occur. Additionally, we do not even know whether our conceptional structures are appropriate for apprehending and evaluating financial events. Thus future financial outcomes are often not known in any calculable way. Nevertheless we must make financial decisions, since even no decision is a decision to maintain or existing financial strategy. Although the discipline of economics has thus far provided little guidance for decision-making under uncertainty, in practice financial market participants usually act in systematic ways.

What is the DATA approach? What does DATA do? How has DATA been applied?