The Medium of Contingency 978-1-137-28654-3 An Inverse View of the Market

'Elie Ayache sticks a long sharp and elegant philosophical knife deep into the heart of the currently fashionable statistical and probabilistic approach to finance and life.'

Emanuel Derman, Professor of Finance, Columbia University. Author of My Life as a Quant (Wiley, 2007) and Models. Behaving. Badly: Why Confusing Illusion with Reality Can Lead to Disaster, on Wall Street and in Life (Free Press, 2012)

'This major new book builds on Elie Ayache's previous book, The Blank Swan. It offers a radical critique of the idea that contemporary derivative trading is based on statistical reasoning and probabilistic models. In making this case, Ayache offers a radical philosophical view of the market as just one instance of the radical nature of contingency in social life. This remarkable book will appeal to philosophers, social scientists and finance specialists equally.'

Arjun Appadurai, Goddard Professor of Media, Culture and Communication, New York University. Author of Banking on Words: The Failure of Language in the Age of Derivative Finance (University of Chicago Press, 2015)

'Elie Ayache is a unique philosopher of probability and finance. For decades, he has worked at the ground floor of the world's derivatives markets, providing traders with the technology they need to create prices that financial theorists imagine emerging from some mysterious probabilistic process. And for decades he has sought the words that might help us all understand how the market creates both its realities and its illusions.

In The Blank Swan, published in 2010, Ayache deconstructed the conception of the market as a stochastic process, explaining how its prices emerge not from probability but from contingency itself. Spectacular breakdowns can occur, he leads us to understand, not because the market gets the prices wrong (underestimating, say, the probability of a black swan) but because there are no prices save those the market creates. In this newand persuasive book, he returns to the fray with an analysis that aims higher and goes deeper. There is indeed a stochastic structure in the market, he now tells us, but this structure is not an underlying reality that drives the market. It itself is a creation of the market.

This book delivers important and rewarding lessons for those who study probability, those who use it, and those who rely on it to understand our economic and financial world.'

Glenn Shafer, Board of Governors Professor at the Rutgers Business School Newark and New Brunswick. Co-author (with Vladimir Vovk) of Probability and Finance: It's Only a Game! (Wiley, 2001)

'The market has largely been, despite its overwhelming importance, one of modern philosophy's unknown continents. Elie Ayache's forceful new work The Medium of Contingency is thus at once a provocation, an invitation, and an essential resource. It gives to philosophy all it needs to begin grappling with the pre-eminent reality ofthe market, and thus to do its duty.'

Jon Roffe,Vice-Chancellor's Postdoctoral Fellow, Philosophy, University of New South Wales. Author of Abstract Market Theory (Palgrave, 2015)