Over the post-event dinner at the Princeton – UChicago quant conference, the conversation veered to the definition of an intelligent system. My co-speaker (a physicist) from the conference defined an intelligent system as a system that is entropy reducing.
Quantum physics may not seem much to have to do with risk and investing, but with subjects like psychophysics explaining the statistical behavior in psychological behavior, it’s just a matter of time that science could explain more of markets. John Gribbin’s biographic work on Schrödinger has a lot of jargon relevant for understanding universal behavior. Apart from wave nature, the book talks about a multiplicity of waves, symmetry of ‘time’, statistical laws, natural behavior, entanglement, natural events and how everything depends on probability. Uncertainty and chance are a part of science. Laws can co-exist with uncertainty and error. This is what makes quantum physics a bit incomprehensible. As according to behavioral finance, the majority can’t calculate and comprehend probability (uncertainty).