Behind The Big Wave

The surfboard leash, the jet ski, and other safety measures used by big-wave surfers might seem a world away from the strategies offered by economist Allison Schrager’s retirement-focused investment advisory firm LifeCycle Finance. But in her recent book An Economist Walks Into a Brothel, she makes that connection, as she also explores the surprising ways that sex workers, military strategists, magicians, and film producers and more understand and manage risk.

Schrager told me that she thinks of financial models “as parables—stylized versions of how the world works, which you take away to figure out some sort of deeper lesson or relationship.” The whole concept of the book, she says, was “the idea that I would retell financial models in a traditional parable structure.”