What can we learn about risk from how services are priced at legal brothels? What does systemic risk have to do with the paparazzi? How are big wave surfers a bit like actuaries? What does fraud tell about how people mis-calculate probabilities?
Meet Allison Schrager, author of An Economist Walks Into a Brothel. Allison is an economist, a journalist and co-founder of LifeCycle Finance Partners. She worked academically and professionally on retirement finance. She has worked with some of the world’s prestigious financial institutions and has written for the likes of The Economist, Bloomberg, Wired, Playboy and Foreign Affairs.
It’s this stacking of skills and experience that I think makes her book An Economist Walks Into a Brothel so insightful and entertaining. In the book, Allison looks at the pricing of sex work at the Moonlite Bunny Ranch in Las Vegas, risk calculations of big wave surfers, how poker players stay rational in the midst of high stakes and a lot more. So many the risk concepts are highly applicable to contexts outside of hardcore finance, Allison’s work exemplifies that and today, she joins us to share her insights in our latest episode.
We get into:
This was a fun and incredibly insightful conversation.
Show notes:
An Economist Walks Into a Brothel
Allison’s article – “Why big-waver surfers are just like actuaries”
The Black-Scholes-Merton model
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