Description: This article, with some humor, describes a movement known as “econophysics” of physicists modeling economic systems, including capital markets, using techniques and concepts developed in studying the out-of-equilibrium dynamics of complex systems. A version of this article appeared in The Actuary UK in August 2004. Reprinted with permission.

Description: This article introduces the reader to probabilistic methods used to model interactions in the financial market place. Three topics are specifically discussed, two concern modeling methods and the other concerns data analysis methods.