| This pulp science fiction story by "Chan Davis" features a discussion of the use of mathematics and a computer for the purposes of stock trading. As Vijay Fafat explains below in his post, while this was "fantasy" in 1958, it became a reality in the 1980's. Mathematics shows up in the discussion of "risk functions" and "preference functions". (Also, one must remember that at the time it was written, computers themselves were thought of as being mathematical objects, while today they are more of a general information, communication and entertainment appliance.) Although the author (now an emeritus professor mathematics at the University of Toronto) intentionally included some mathematics in it, I would guess that the intended point of the story was more about corruption and corporate monopolies.
Note that the description below from Vijay Fafat includes some "spoilers". If you would like to enjoy the "twists" in the story, then I recommend you read the story before continuing on to Vijay's remarks.
| Contributed by
Vijay Fafat
A simple story about an FTC investigator who tricks a salesman into committing slander against a rival company, presumably shutting down the company (the investigator's brother is a senior executive in the rival company; so quite an unethical outcome in the story). The salesman is shown to be pitching an automated machine - called a Statistomat - which can manage investments. The Statistomat is capable of implementing a personalized, time-varying utility function to create customized investment portfolios, analyzing a variety of publicly-available information on traded companies and instituting program-trading (which is remarkable because the story was written before 1954 per Chan Davis, published 1958. Program trading in equities took off in the 80s and was widely blamed for the crash of 1987). Since the statistomat is that much cheaper than its rival, the larger company wants it shut down and one way of doing that is to get the
newbie into regulatory trouble.
I didn't find the story very convincing; indeed, I don't think the salesman was even slanderous (and even if he were to be, it is hard to believe the company would get into much trouble based on just half-a-statement). Math content is minimal, though a nice, brief explanation of why risk-averse utility functions are concave down.
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This story originally appeared in the January 1958 issue of Infinity and in 2014 it was reprinted in The Mathematical Intelligencer.
It should be noted that Chandler Davis is the co-organizer of workshops on mathematical writing that resulted in the book Shape of Content. |
