Noisy Factors in Law - Prof. Adriana Robertson (Chicago)

This podcast episode, titled "Noisy Factors" in Law, emphasizes the need for transparency and critical evaluation in legal and financial analyses. It highlights the implications of using the Fama-French model, a widely adopted finance tool, in legal contexts. The retroactive changes in the model's data raise questions about the consistency and reliability of research findings, impacting the assessment of investment products and securities litigation. Acknowledging the inherent subjectivity ("judgment") involved in financial research, the episode underscores the importance of data and code sharing to ensure transparency and prevent buried biases. Encouraging openness and welcoming unexpected findings will foster collaboration between science and law to address complex decision-making challenges.