Dr Nadia Blackshaw

This course is available on the BSc in Philosophy and Economics, BSc in Philosophy, Logic and Scientific Method, BSc in Philosophy, Politics and Economics, BSc in Philosophy, Politics and Economics (with a Year Abroad), BSc in Politics and Philosophy, Erasmus Reciprocal Programme of Study and Exchange Programme for Students from University of California, Berkeley. This course is freely available as an outside option to students on other programmes where regulations permit. It does not require permission. This course is freely available to General Course students. It does not require permission.

One of the most surprising discoveries of 20th century physics is that enormous progress can be made by embracing our uncertainty, and modelling it using probabilistic techniques. This powerful thinking led to discoveries like the first evidence of the atomic hypothesis, that the matter is made of tiny atoms moving randomly about. It also paved the way for the discovery of quantum mechanics, our best theory of matter and energy. These techniques even spilled outside of physics, into places like the social and financial world, where similar techniques were applied.

This course is about some of the philosophical issues underlying the physics of uncertainty, and the kinds of issues they raise for the natural and social sciences. It explores the change from classical to quantum physics, analysing the shift that this new theory had on our understanding of the world. For the final few weeks of term, the course looks at how similar physics models have been applied in finance, leading to discussions on the role of models, how physics relates to finance, and whether probability represents the same thing in both domains.

Students in this course will explore some important conceptual and philosophical questions, like: How are assumptions about randomness compatible with observed forms of determinism? How is it possible to seek truth using statistical theories? What does it mean to be an atom? How does the quantum world differ from the everyday world? What explains why physical models have unexpected applications in finance? To what extent do such applications help to underpin how the prices of financial instruments are set?

This course will proceed at a conceptual level that is suitable for students of all backgrounds: no background in physics is needed.

10 hours of lectures and 10 hours of classes in the Winter Term.

This course has a reading week in Week 6 of Winter Term.

The teaching will consist of a weekly in-person lecture and class, with one reading week included.

Students will write one formative essay plan in preparation for the summative essay.

Weekly essential readings will be provided on Moodle, selected individually from various book chapters and journal articles. Some indicative readings include:

- MacKenzie, Donald. An Engine Not a Camera, excerpts.

- Malkin, Burton G. A random walk down Wallstreet, excerpts.

- Norton, John D. Einstein for Everyone, Chapters 34-37 on Brownian motion and the origins of quantum theory.

- Weatherall, James O. The Physics of Wallstreet (optional further reading)

Exam (60%), duration: 120 Minutes, reading time: 5 minutes in the Spring exam period.

Essay (40%).

There are two parts to the summative assessments: a 2hr exam (60%) and an essay (40%), building on the formative essay plan.

The exam for this course is an e-Exam, an invigilated in-person exam on the LSE campus in which, instead of completing your answers on a paper script, you use your own personal laptop to type your answers and submit electronically. e-Exam duration: 2 hours.