Metaphors, Models & Theories

Derman, Emanuel

doi:10.2139/ssrn.1713405

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Metaphors, Models & Theories

Emanuel Derman

Columbia University

November 22, 2010

Abstract:
Theories deal with the world on its own terms, absolutely. Models are metaphors, relative descriptions of the object of their attention that compare it to something similar already better understood via theories. Models are reductions in dimensionality that always simplify and sweep dirt under the rug. Theories tell you what something is. Models tell you merely what something is partially like.

Number of Pages in PDF File: 14

Keywords: financial models, theories, valuation, pricing

JEL Classification: G00, G12, G13

working papers series

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Date posted: November 22, 2010 ; Last revised: December 6, 2010

Suggested Citation

Derman, Emanuel, Metaphors, Models & Theories (November 22, 2010). Available at SSRN: http://ssrn.com/abstract=1713405 or http://dx.doi.org/10.2139/ssrn.1713405

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Emanuel Derman (Contact Author)

Columbia University ( email )

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