[PDF] ✑ An Economist Walks Into a Brothel: And Other Unexpected Places to Understand Risk By Allison Schrager – 1sm.info

An Economist Walks Into a Brothel: And Other Unexpected Places to Understand Risk A Financial Times Book Of The Month Pick For April Is It Worth Swimming In Shark Infested Waters To Surf A Foot, Career Record Wave Is It Riskier To Make An Action Movie Or A Horror Movie Should Sex Workers Forfeit Percent Of Their Income For Added Security Or Take A Chance And Keep The Extra Money Most People Wouldn T Expect An Economist To Have An Answer To These Questions Or To Other Questions Of Daily Life, Such As Who To Date Or How Early To Leave For The Airport But Those People Haven T Met Allison Schrager, An Economist And Award Winning Journalist Who Has Spent Her Career Examining How People Manage Risk In Their Lives And CareersWhether We Realize It Or Not, We All Take Risks Large And Small Every Day Even The Most Cautious Among Us Cannot Opt Out The Question Is Always Which Risks To Take, Not Whether To Take Them At All What Most Of Us Don T Know Is How To Measure Those Risks And Maximize The Chances Of Getting What We Want Out Of LifeIn An Economist Walks Into A Brothel,Schrager Equips Readers With Five Principles For Dealing With Risk, Principles Used By Some Of The World S Most Interesting Risk Takers For Instance, She Interviews A Professional Poker Player About How To Stay Rational When The Stakes Are High, A Paparazzo In Manhattan About How To Spot Different Kinds Of Risk, Horse Breeders In Kentucky About How To Diversify Risk And Minimize Losses, And A War General Who Led Troops In Iraq About How To Prepare For What We Don T See ComingWhen You Start To Look At Risky Decisions Through Schrager S New Framework, You Can Increase The Upside To Any Situation And Better Mitigate The Downside This is a book by a non academic economist that explains the core ideas of financial economics in terms of non financial activities, jobs, and recreations that are done by real people but which all involve extraordinary amounts of risk and uncertainty The initial story line about brothels is a nice touch that gets the author s points across well Other vignettes in later chapters cover such different topics as turning around Cinnabon, planning for your trip to the airport, breeding champion rac This is a book by a non academic economist that explains the core ideas of financial economics in terms of non financial activities, jobs, and recreations that are done by real people but which all involve extraordinary amounts of risk and uncertainty The initial story line about brothels is a nice touch that gets the author s points across well Other vignettes in later chapters cover such different topics as turning around Cinnabon, planning for your trip to the airport, breeding champion racehorses, investing in new blockbuster movies, planning your magic show, big wave surfing, and fighting the Iraqi army in the first Gulf War In addition to this fun, risk ideas are also discussed in terms of financial economics and personal retirement planning.The intuition for all of these is to link risk to the process of figuring out what one wishes to do and then thinking through the details and what needs to occur or not occur for plans to be realized This all makes good sense but it is surprising how infrequently financial economic terms are presented in contexts that seem divorced from the regular choices people have to make and follow through upon everyday and over the course of a lifetime.The book is thoughtful and even though I was familiar with much of the material, I finished the book with a sense that I had learned something, and enjoyed myself in the process We need to take risks to make our lives better In the 16th century, people started to think about risk as something controllable, not left to fate Once risk is measured it can bought or sold No institution spendstime and energy on risk planning than the military Risk, a Greek seafaring term, rhizik n, a dangerous hazard The Middle High German word rysigo means, to dare, to undertake, enterprise, hope for economic success Financial economics assumes risk is a critical component of v We need to take risks to make our lives better In the 16th century, people started to think about risk as something controllable, not left to fate Once risk is measured it can bought or sold No institution spendstime and energy on risk planning than the military Risk, a Greek seafaring term, rhizik n, a dangerous hazard The Middle High German word rysigo means, to dare, to undertake, enterprise, hope for economic success Financial economics assumes risk is a critical component of value.It was interesting to read about how risk is dealt with among brothels, movie studios, the paparazzi, poker champions, criminals, race horse breeders, magicians, big wave surfers, and the military No risk, no reward risk is the input, reward is the output The most important thing to figure out is what you want As Goethe wrote, The dangers of life are infinite, and among them is safety The author lists the following questions to help you determine what you want 1 What is your ultimate goal If you achieve it, what does that look like 2 How can you achieve your goal with no risk at all, or as little risk as possible 3 Is that no risk option possible or desirable If not, how much risk do you need to take to get what you want Some interesting facts 53% of movies don t earn back production costs at the box office.Idiosyncratic risk the risk unique to a particular asset Your Apple stock might go down Diversify.Systemic risk affects the larger system, entire market crashes.Secretariat s heart was 21 pounds but that doesn t translate into speed unless it meshes with the horse s other features Simply translating a bigger heart into another horse is like putting a Ferrari engine in a Subaru Fun is like life insurance the older you get, theit costs Frank Mckinney Hubbard, American CartoonistAn interesting read on a great topic I d also recommend Against the Gods by Peter Bernstein, reviewed herein Quite simply this book is bad The writing is unclear, the examples poorly explained, definitions sparse, and call backs poorly integrated It feels like the author found three or four examples they wished to use and kind of relied on them for everything When an example was used to explain a phenomenon, the tie wasn t obvious Some of this could have been improved by clearer writing and some of this could have been improved by spendingtime to talk through the logic For instance, the firs Quite simply this book is bad The writing is unclear, the examples poorly explained, definitions sparse, and call backs poorly integrated It feels like the author found three or four examples they wished to use and kind of relied on them for everything When an example was used to explain a phenomenon, the tie wasn t obvious Some of this could have been improved by clearer writing and some of this could have been improved by spendingtime to talk through the logic For instance, the first section of the book is on the risk premium sex workers pay to work in managed brothels The author then explains how that compares to illegal markets for sex and drugs and how the difference in price provides information on supply, demand, and safety This section could have used a fewexamples rather than just leaning on sex work.The book then talks about options but brings in Black Scholes Merton which needlessly complications the discussion of options The types of options are simply mentioned with one sentence and two sentence explanations with few examples BSM shouldn t be introduced for a number of reasons but given that it s going to be brought up, flesh it out The book also talks about general risk strategies but doesn t provide enough examples to apply to life then introduces risk homeostatis to imply that it s all useless anyway.I strongly preferred Thinking in Bets Making Smarter Decisions When You Don t Have All the Facts which was focused, loaded with examples, and very readable This is a good INTRODUCTORY book on risk through finance world lens Still recommend this for most layman, but not to advanced finance practitioners, unless they want to refresh their fundamentals. This book is best read as a primer on basic risk and reward analysis in economics Most concepts, like the diversification of risk, the difference between systematic and idiosyncratic risk, the difference between hedging and insurance, will not be surprising to even those reading regular business news, but the treat here is the little stories Schrager tells to illustrate these ideas Schrager shows how brothels pay their women less money, almost 50% less, than those women would earn on the stree This book is best read as a primer on basic risk and reward analysis in economics Most concepts, like the diversification of risk, the difference between systematic and idiosyncratic risk, the difference between hedging and insurance, will not be surprising to even those reading regular business news, but the treat here is the little stories Schrager tells to illustrate these ideas Schrager shows how brothels pay their women less money, almost 50% less, than those women would earn on the streets, but these women trade off the income for risk reduction The johns payfor the safe experience though up to 300% , partially because both them and the women are affected by tax rates, which cuts wages and raises prices She shows how horse raising encourages high risk, high reward studs like War Front, who got 250,000 a mating session, or almost 25 million a year, even though the market leads to many failures and mass in breeding almost all thoroughbreds are descended from a single male in the early 1700s, the Darley Arabian Another stud in the 1980s, Northern Dancer, sired most all of the next generation She explains why paparazzi like Santiago Baez tried to organize photogs in the gold rush era of the early 2000s, with each taking some percentage of the high income photographs, but she also explains why incentives led most of these photogs to cheat and why the alliances fell apart.So there are some interesting journalistic exposes here, but don t expect anything that surprising In An Economist Walks into a Brothel, Allison Schrager demonstrates through real life examples how an understanding of different types of risk and risk management strategies can help people make better decisions Each chapter opens with a profile of someone whose work involves some form of risk professional poker player, prostitute, celebrity photographer, etc and that interview is a launching point for discussion This format works well, as it makes the concepts easy to understand for some In An Economist Walks into a Brothel, Allison Schrager demonstrates through real life examples how an understanding of different types of risk and risk management strategies can help people make better decisions Each chapter opens with a profile of someone whose work involves some form of risk professional poker player, prostitute, celebrity photographer, etc and that interview is a launching point for discussion This format works well, as it makes the concepts easy to understand for someone without a background in economics.This book came out a year ago this month, but reads like it was written in a much different time The intro talks about how this is a wonderful time to be alive as there are no major short terms threats to the human race, and the economy is booming Fast forward to a year later when COVID 19 changed all that It is also amusing that one of success stories featured in one of the chapter is the CEO of Carnival Cruises.The author took a risk when writing this book that life would be the same a year later This serves to illustrate one of her points when discussing risk, there is always a chance that the unlikely will happen Allison Schrager with her PhD in Economics, rather than taking it down the academic track, trained under Nobel laureate Robert Merton and with her great journalistic skills wrote this entertaining and fascinating book on the application of the cardinal principles of Risk and Reward as it is normally used with all its math methodology in the Financial sector to see how the concept works out for a sex worker at the Bunny Ranch, thoroughbred stud breeders in Kentucky, Big Wave surfers, Poker Play Allison Schrager with her PhD in Economics, rather than taking it down the academic track, trained under Nobel laureate Robert Merton and with her great journalistic skills wrote this entertaining and fascinating book on the application of the cardinal principles of Risk and Reward as it is normally used with all its math methodology in the Financial sector to see how the concept works out for a sex worker at the Bunny Ranch, thoroughbred stud breeders in Kentucky, Big Wave surfers, Poker Players and with aging folks facing retirement risk I was listening to the Indicator on NPR and they were interviewing Allison Schrager who is an economist and who wrote this book, An Economist Walks into a Brothel I have many interests and economics is one of them Unfortunately, this book won t make it to the best seller and I won t be surprised if I m the only reviewer The information presented in the book is basic and logical to understand Anyone who grabs this book should understand clearly the basic on economics Instead of having to b I was listening to the Indicator on NPR and they were interviewing Allison Schrager who is an economist and who wrote this book, An Economist Walks into a Brothel I have many interests and economics is one of them Unfortunately, this book won t make it to the best seller and I won t be surprised if I m the only reviewer The information presented in the book is basic and logical to understand Anyone who grabs this book should understand clearly the basic on economics Instead of having to buy this informational book, I would like to see it in the public domain so that it will reachreaders This book introduces the reader to risk in many diverse professions including sex work, surfing, making films in Hollywood and planning military campaigns in war In short, risk is unavoidable in all aspects of life, so considering the psychology of risk can help us take smart risks that feel comfortable to us We learn that the legalization of sex work, for example, reduces risk both for the sex worker and the client and may be worth the increase in price for services as a kind of insurance for This book introduces the reader to risk in many diverse professions including sex work, surfing, making films in Hollywood and planning military campaigns in war In short, risk is unavoidable in all aspects of life, so considering the psychology of risk can help us take smart risks that feel comfortable to us We learn that the legalization of sex work, for example, reduces risk both for the sex worker and the client and may be worth the increase in price for services as a kind of insurance for everyone involved Who knew that there is a definite difference in the risk of making a horror film versus an action film Military planning, even with the technological advances in military equipment, must be able to be flexible and change rapidly depending on changing conditions, so the military, which seems to value chain of command decisions, must also encourage those on the ground to think quickly and creatively and make alternate decisions on their own in the moment The author interviewed professionals doing many kinds of work to get their insights on how they manage risk The result is easy to read and entertaining while teaching valuable lessons


About the Author: Allison Schrager

Is a well-known author, some of his books are a fascination for readers like in the An Economist Walks Into a Brothel: And Other Unexpected Places to Understand Risk book, this is one of the most wanted Allison Schrager author readers around the world.


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