Free Terror on Wall Street, a Financial Metafiction Novel by Kenneth Eade, Gordon L. Eade

Padoa-Schioppa & Assad in 2006.
         “Frank Knight, an economist, defined risk in the 1920s as 'a quantity with known outcome values and known outcome probabilities', and ambiguity as 'a quantity with known outcomes and unknown probabilities.'  He said that risk was a measurable quantity of uncertainty that is distinct from ambiguity, which is an unmeasurable uncertainty.
         “We’ve inserted electrodes in both Chester and Lolita’s orbitofrontal cortex, which is the part of the brain associated with decision making.  That’s this part of the brain.”  Ike pointed to a diagram of the brain on the wall, where a highlighted portion of the frontal lobe was located just behind the eyes.
         Ike positioned Chester and Lolita on a chair in front of two separate computer screens.
         “Watch the monkeys make their choices by pointing to choices on what risks to take.  The higher the risk, the more juice they get.”
         “How do they make their choices?”
         “There are two kinds of juice.  Each juice is represented by the colored squares that appear on the monitor.  The more colored squares, the greater amount of juice they get.  They make their choices with eye movements, and the computer disperses the juice they choose through these tubes.”
         “Then why don’t they just pick the highest number of squares each time?”
         “Because sometimes, when they do, the computer doesn’t deliver any juice.  Picking the lower amount gets them juice every time, but in a smaller amount.”
         They watched as Ike and the monkeys performed the experiment.
         “See, they’re taking a risk on whether or not the juice will be delivered.”
         “They’re choosing to get the most juice, whether the risk is higher or not.”
         “That’s right, Carlos.”
         “They’re greedy.”
         “No, Bob, they’re taking a risk to get the highest return.”
         Ike showed them a graph printout from the experiment. 
         “This is a printout of a longer experimental period.  They have consistently taken a greater risk to receive a bigger reward.”
         Bob stared at the graphs.  “Fascinating.”
         “With humans, our studies show that we would rather not lose a certain amount of money more than we relish earning the same amount of money.  We also learn that, over time, our decision making changes.  People who choose one candy bar today over two tomorrow are making an impulsive choice.  But give them the same decision over 1 candy bar in 100 days or 2 candy bars in 101 days, and they opt for two.”
         “Interesting.  So, all this monkey business explains how brokers cheat their clients by offering them investments with higher returns and greater risks.”
         “Watch it, Larry, we don’t all cheat clients,” said Bob. 

 
     
     
     
    CHAPTER FIFTEEN
    THE LONG AND WINDING ROAD
     
     
     
    Ike got back to the car just as things started moving on the interstate. Snookie popped the trunk and Ike threw the water in the back and jumped into the passenger’s seat with the bags of fruit just as the motorists behind him started to honk their horns in protest.       
         “I was getting worried.”
         “Thanks, Snook.  It’s good to know that someone cares.”
         “It’s very scary.  The phones still don’t work, so I can’t call my parents.  The radio works, but it’s all bad news – they’re talking about the military being authorized to help quell social disturbances in all major cities.”
         “Sounds like martial law.”
         “Isn’t that unconstitutional?”
         “Yup.  It’s a complete suspension of the Constitution.  But there is precedent for it.  Lincoln was the first president to use it during the Civil War.  You heard anything about the bank runs?”
         “They’re being silent on that.”