Re: fuzzy finance


Subject: Re: fuzzy finance
From: Paul Victor Birke (nonlinear@home.com)
Date: Thu Mar 02 2000 - 13:28:55 MET


Will Dwinnell wrote:
>
> I (Will Dwinnell) wrote:
> "I was just thinking that, in the end, a buyer pays only a single price. Certainly, before
> the transaction, available information may allow us to infer some distribution of price
> values, but both probability and fuzzy logic deal in distributions. Once the transaction has
> occurred, however, the price is known, which makes this seem more like a probability issue to
> me."
>
> Paul Victor Birke wrote:
> "Well, while there is only one finite price at a given time, there could have been >>others<<
> !"
>
> Right, but that is practically the definition of a probability problem: "Whole there is only
> one face on the die showing, the could have been others". I am not saying that fuzzy logic
> would not be useful in financial analysis, but the fundamental process of living with limited
> information (beforehand) about specific events which have definite outcomes sounds like
> probability.
*******************************
Dear Will

Well in the case you cited, the numbers that could have come up are
rather radically different. I am talking about numbers in the vicinity
of the actual price transacted. Close AND cigars!!

But there is no doubt that probability concepts could have been used.
The Uniform Distribution is from Probability Theory, of course.

It is kinda back to the poison water bottle definition of membership
versus probability. While for that story it is clear, it may not be so
clear in other contexts, the distinction between membership and
probabiltiy. Like I mentioned before, I look at pricing philosophically
in a Fuzzy Setting. Personally, I am more happier there than placed in
sort a roulette wheel Probability Theory Setting.

Paul

############################################################################
This message was posted through the fuzzy mailing list.
(1) To subscribe to this mailing list, send a message body of
"SUB FUZZY-MAIL myFirstName mySurname" to listproc@dbai.tuwien.ac.at
(2) To unsubscribe from this mailing list, send a message body of
"UNSUB FUZZY-MAIL" or "UNSUB FUZZY-MAIL yoursubscription@email.address.com"
to listproc@dbai.tuwien.ac.at
(3) To reach the human who maintains the list, send mail to
fuzzy-owner@dbai.tuwien.ac.at
(4) WWW access and other information on Fuzzy Sets and Logic see
http://www.dbai.tuwien.ac.at/ftp/mlowner/fuzzy-mail.info
(5) WWW archive: http://www.dbai.tuwien.ac.at/marchives/fuzzy-mail/index.html



This archive was generated by hypermail 2b25 : Thu Apr 06 2000 - 15:59:47 MET DST