Ignoring the colourful and sensational title of the book for a moment, An Economist walks into a Brothel is a non-academic take on the critical nature of risks within every day living. The world is not divided into persons who take risks and those who don’t. We all take risks in our every day lives. From deciding when to set out to the airport to catch a flight, to which flight ticket we buy fro the various classes of tickets on offer and to which restaurant we choose for a romantic dinner. The risk involved in any decision or action is the probability of the alternate outcome or result compared to the anticipated one.
In An Economist walks into a Brothel, the author who is an economist and works in finance (retirement funds manager) explores risks in the most unusual places – a brothel, racehorse industry, Hollywood, through the lends of a paparazzi, the military, etc. Through the anecdote of each of these industries, strategies for risk-taking, the implications of taking risks and how to mitigate the effects of risks. While An Economist walks into a Brothel succeeds in demystifying the science (and finance) of risk and brings it into the domain of everyday decision making and reveals risk strategies in places they would be least expected, the well-told anecdotes are not maximised to the full. The link between the anecdotes and the risk topics covered in each anecdote is often week and not fully explored. Besides the risk strategies and elements highlighted in broad strokes, the risk strategies highlighted in the book all seem to be standalone with no overarching integration. This leaves the reader entertained but a bit frustrated. The book is written in the mould of Freakonomics but does not quite pack the same punch. There are interesting bits and at the same time, one is left more risk-aware. So, it is a good read in all.