准版主moontory和majia20112011吵架的神贴～技术or直觉？

BusFin

no need to look down at others. everyone can claim that what they are doing is the mainstream, as long as they really enjoy their work and can find other people out there enjoy their work too. Many papers are just bullshit, regardless of the fields. It does not mean the whole field is nonsense. To build up a network, the first lesson is to respect other people, esp their rights to publish bullshit if they can.

majia20112011

Even agreeing what you said (although I do not think Merton's formulation is not quite technical), the spirit of B-S can be summarized in one simple plain sentence without mentioning any of the algebra and that is the spirit. I never look down upon technical stuff. In fact, most of the Econometrica papers are quite technical. However, you need to use technique for a good reason, not just show people how good you are in techniques. All great findings in asset pricing and corporate finance, no matter how technical they might be in appearance, can be summarized in at most a couple of plain sentences without mentioning any of the techniques involved and a good example is Revelation Principle.

B-S model, at its era, was quite technical to the Finance academic community and that is why binomial tree model comes out.

-- by 会员 moontroy (2011/3/28 13:31:55)

majia20112011

I look down on the author of this thread but looks down upon me because he does not deserve to look down upon me.  

no need to look down at others. everyone can claim that what they are doing is the mainstream, as long as they really enjoy their work and can find other people out there enjoy their work too. Many papers are just bullshit, regardless of the fields. It does not mean the whole field is nonsense. To build up a network, the first lesson is to respect other people, esp their rights to publish bullshit if they can.

-- by 会员 BusFin (2011/3/29 0:14:21)

majia20112011

Define insufficient training first. I can say that some asset pricing people have insufficient training in financial institutional knowledge that is key to understand corporate finance.

It's equally difficult to produce a good asset pricing paper and a good corporate finance paper.

It's way easier to produce a bad corporate finance paper that people with insufficient training can understand. hehe

-- by 会员 Stiglitz (2011/3/28 22:25:56)

moontroy

Even agreeing what you said (although I do not think Merton's formulation is not quite technical), the spirit of B-S can be summarized in one simple plain sentence without mentioning any of the algebra and that is the spirit. I never look down upon technical stuff. In fact, most of the Econometrica papers are quite technical. However, you need to use technique for a good reason, not just show people how good you are in techniques. All great findings in asset pricing and corporate finance, no matter how technical they might be in appearance, can be summarized in at most a couple of plain sentences without mentioning any of the techniques involved and a good example is Revelation Principle.

-- by 会员 majia20112011 (2011/3/29 2:00:05)

What is your point? When people say some paper are quite technical, it is not necessarily non-sense. In fact you can find many technical paper with great economical insight. Great idea has no significant relationship with the technics  it was illustrated, a very simple idea may need a quite technical model to show, and in many cases some simple and sounds reasonable idea often turns out to be wrong if you model it carefully. B-S model(sorry, it is not Merton's model, though they were related), when it first came out, was quite technical(though basic to physicians) to the Finance academic community that very few people really understood it, you can see many rumors about how the model came out and how ONE of them try to build and solve the model.

bernanke

不过technical的确不如economic intuition重要。

majia20112011

My point is very simple: there are quite a few papers nowadays which are purely a showoff of techniques without any economic insight. The rest is what you have said. Papers with good economic insight is because their ideas are good and intuitive and their conclusion can be summarized in at most a couple of plain English sentences.  If those idea needs to be illustrated using whatever technique as necessary, then use it. But do not use technique solely for the purpose of showing off something unless you have some real interesting economic story to tell. The art of economic modelling is to illustrate your point using the simplest possible model, although sometimes the simplest possible model might be quite technical. At least this is what I have learnt from Bob Lucas and Ed Prescott.  They write technical papers, but they use technique for good reasons.


I have no idea if the technique in B-S is basic to physicists, but their idea is simple and intuitive and can be expressed in plain English. If that needs to be done in such technical way,  that is fine. You seems to be indicating finance people do not have as much technical skills as physicists. But, rather than derivative pricing, I do not see any physicists making real big contributions to the finance literature (exclude John Cochrane or Steve Ross who has a undergraduate physics degree because their PhD training are solid econ and finance), in particular the corporate finance area. What's more, as somebody in the board pointed out a long time ago (sorry I cannot remember the ID) in recent years most job market stars (especially Chinese) are from traditional finance and econ background and that does contribute to the point that economic intuition and  institutional knowledge are more important than pure technical skills.

Even agreeing what you said (although I do not think Merton's formulation is not quite technical), the spirit of B-S can be summarized in one simple plain sentence without mentioning any of the algebra and that is the spirit. I never look down upon technical stuff. In fact, most of the Econometrica papers are quite technical. However, you need to use technique for a good reason, not just show people how good you are in techniques. All great findings in asset pricing and corporate finance, no matter how technical they might be in appearance, can be summarized in at most a couple of plain sentences without mentioning any of the techniques involved and a good example is Revelation Principle.

-- by 会员 majia20112011 (2011/3/29 2:00:05)

What is your point? When people say some paper are quite technical, it is not necessarily non-sense. In fact you can find many technical paper with great economical insight. Great idea has no significant relationship with the technics  it was illustrated, a very simple idea may need a quite technical model to show, and in many cases some simple and sounds reasonable idea often turns out to be wrong if you model it carefully. B-S model(sorry, it is not Merton's model, though they were related), when it first came out, was quite technical(though basic to physicians) to the Finance academic community that very few people really understood it, you can see many rumors about how the model came out and how ONE of them try to build and solve the model.

-- by 会员 moontroy (2011/3/29 2:24:26)

Stiglitz

大家其实没啥分歧嘛。  好的paper要有重要的insight，不论是corporate finance还是asset pricing。
什么什么是核心的话让人不爽而已。 好文章都不好写。需要的技能稍有差别而已。

BusFin

呵呵，看来科班出身的对physicists转finance的家伙很有看法。
任何领域（包括物理）要发顶级文章，都一定得有让人耳目一新的insight。

兼收并蓄，有容乃大

My point is very simple: there are quite a few papers nowadays which are purely a showoff of techniques without any economic insight. The rest is what you have said. Papers with good economic insight is because their ideas are good and intuitive and their conclusion can be summarized in at most a couple of plain English sentences.  If those idea needs to be illustrated using whatever technique as necessary, then use it. But do not use technique solely for the purpose of showing off something unless you have some real interesting economic story to tell. The art of economic modelling is to illustrate your point using the simplest possible model, although sometimes the simplest possible model might be quite technical. At least this is what I have learnt from Bob Lucas and Ed Prescott.  They write technical papers, but they use technique for good reasons.


I have no idea if the technique in B-S is basic to physicists, but their idea is simple and intuitive and can be expressed in plain English. If that needs to be done in such technical way,  that is fine. You seems to be indicating finance people do not have as much technical skills as physicists. But, rather than derivative pricing, I do not see any physicists making real big contributions to the finance literature (exclude John Cochrane or Steve Ross who has a undergraduate physics degree because their PhD training are solid econ and finance), in particular the corporate finance area. What's more, as somebody in the board pointed out a long time ago (sorry I cannot remember the ID) in recent years most job market stars (especially Chinese) are from traditional finance and econ background and that does contribute to the point that economic intuition and  institutional knowledge are more important than pure technical skills.

Even agreeing what you said (although I do not think Merton's formulation is not quite technical), the spirit of B-S can be summarized in one simple plain sentence without mentioning any of the algebra and that is the spirit. I never look down upon technical stuff. In fact, most of the Econometrica papers are quite technical. However, you need to use technique for a good reason, not just show people how good you are in techniques. All great findings in asset pricing and corporate finance, no matter how technical they might be in appearance, can be summarized in at most a couple of plain sentences without mentioning any of the techniques involved and a good example is Revelation Principle.

-- by 会员 majia20112011 (2011/3/29 2:00:05)

What is your point? When people say some paper are quite technical, it is not necessarily non-sense. In fact you can find many technical paper with great economical insight. Great idea has no significant relationship with the technics  it was illustrated, a very simple idea may need a quite technical model to show, and in many cases some simple and sounds reasonable idea often turns out to be wrong if you model it carefully. B-S model(sorry, it is not Merton's model, though they were related), when it first came out, was quite technical(though basic to physicians) to the Finance academic community that very few people really understood it, you can see many rumors about how the model came out and how ONE of them try to build and solve the model.

-- by 会员 moontroy (2011/3/29 2:24:26)

-- by 会员 majia20112011 (2011/3/29 9:16:03)

moontroy

[bgcolor=#ffffff]My point is very simple: there are quite a few papers nowadays which are purely a showoff of techniques without any economic insight. The rest is what you have said. Papers with good economic insight is because their ideas are good and intuitive and their conclusion can be summarized in at most a couple of plain English sentences.  If those idea needs to be illustrated using whatever technique as necessary, then use it. But do not use technique solely for the purpose of showing off something unless you have some real interesting economic story to tell. The art of economic modelling is to illustrate your point using the simplest possible model, although sometimes the simplest possible model might be quite technical. At least this is what I have learnt from Bob Lucas and Ed Prescott.  They write technical papers, but they use technique for good reasons.


I have no idea if the technique in B-S is basic to physicists, but their idea is simple and intuitive and can be expressed in plain English. If that needs to be done in such technical way,  that is fine. You seems to be indicating finance people do not have as much technical skills as physicists. But, rather than derivative pricing, I do not see any physicists making real big contributions to the finance literature (exclude John Cochrane or Steve Ross who has a undergraduate physics degree because their PhD training are solid econ and finance), in particular the corporate finance area. What's more, as somebody in the board pointed out a long time ago (sorry I cannot remember the ID) in recent years most job market stars (especially Chinese) are from traditional finance and econ background and that does contribute to the point that economic intuition and  institutional knowledge are more important than pure technical skills.

[/bgcolor]

I agree with your basic point but I may not holding such a strong attitude as you. Start with a great idea and then find a way to model it is a good way to do research, but there are many other possible way to contribute.
There are indeed some very technical papers at their era but without too many fresh economics insight, but they provide some very useful tool for following researches(a not so good example might be theoretical econometrics, they mainly try to solve some problems in applied field, or just theoretical interest, but the solution itself often lack of any economic insight).
There are also many other great works with some intuitions difficult to express in plain sentences, like Arrow's impossibility theorem, in those situations, technical work often provides some results out of people's intuitive thoughts, and it is those technical results which push people to rethink some so called "common sense", and change our view of the world. There are many examples in Micro theories generating those "counter intuitive" results, and many of them are not easy to explain in a very few sentences.
And I think you know that there are many models and famous papers analyzing the same issue but generate totally different results with their own great ideas(like Macro, since you mentioned Lucas and Prescott), and the first step for us to compare them is to understand the technical details.
And even though technical level itself has no direct relationship with the quality of the paper, I would say it is still a not so good indicator of quality of research in different field, the history of economic or finance research in a field is a history of relaxing assumption or finding problems in previous methods, both often requires a more technical method to deal with.


I'm not saying you are wrong, and no offense. I just say technical issue is not a secondary factor as you mentioned, it is a very important part of the research and I would be very cautious to make those statements.