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Opalesque Exclusive: Economics, information science, and the behavior of crowds, using science to predict market impacting events Kirsten Bischoff, Opalesque New York: Thinking outside of the box is typically a phrase that one hears bandied about in the more creative industries. But finance, with its spread sheets and due diligence requirements, is an industry rife with the constraints of boxes, and by that fact may require thinking outside of them more so in order to obtain that ever elusive “edge”. Charles Plott, PhD, the Edward S. Harkness Professor of Economics and Political Science at California Institute of Technology will be speaking about his studies in experimental economics and behavioral finance with his presentation on the “Smart Market Applications for Predicting Market Impacting Events” at the GAIM conference in Monaco in early June (Details here). Recently, Opalesque had a chance to speak with Dr. Plott about how science may be used as a tool in finance to provide one possible doorway to allow managers to step outside of the box.

Dr. Plott’s area of research is in the behavioral foundations of economics and political science. The theory that suggests the possibility of predicting market impacting events “comes from rational expectations in markets that say that knowledge of insiders quickly becomes assimilated into price.” Dr. Plott po......................

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