There's been a lot of talk about how the quants let Wall Street down, failing to predict the meltdown that engulfed the world. The good news is that the quantitative community, at the academic level, is certainly willing to push into new frontiers in its quest for improvement.

The New York Times notes that several groups are injecting the behavioral elements into their financial models. A team at Cornell was awarded an NSF grant to look into this. Andrew Lo at MIT is engaged in research that "focuses on applying insights from disciplines, including evolutionary biology and cognitive neuroscience, to create a new perspective on how financial markets work." He calls this the "the adaptive-markets hypothesis." Will it someday replace the efficient markets hypothesis? In any case, the grand march of the quantitative engine rolls on. 

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