Option pricing theory vs. queuing theory

◈ Both theories are for modeling and analysis
􀂄 The “science” of pricing and queuing
􀂄 Analytical closed-form solutions for the general case is very difficult
or impossible to obtain
◈ Both belong to a branch in applied mathematics
􀂄 Involves sophisticated theoretical mathematics and statistics
􀂄 Lead to new mathematical tools, theories and analysis
◈ Both based on “unrealistic” assumptions for mathematical
tractability
􀂄 Exponential distribution for queuing theory
􀂄 Log-normal stock price distribution for option pricing
◈ They are often used for design and optimization
􀂄 Strong predictive power
􀂄 Useful theoretical tools
◈ Therefore, be cautious on the results due to underlying
assumptions, and be appreciative to the models derived and the
expressive beauty of mathematics