Apparently, the old Black Scholes option pricing model has been replaced by the Lattice model. I'm wondering if anyone has any information on this model.
I don't think that the Lattice method has replaced the Black-Scholes formula. B-S is a very nice arbitrage pricing model which only requires assumptions about future interest rates (or risk free opportunity cost fro capital) and the future volatility of the underlying asset. For sure, it assumesnormally distributed underlying price, and it is frequently showed that the tails of stock price distributions are too think for that to be true, but I think there are "fixes" for that.
The Lattice method is more wide open to assumptions. That makes it both more flexible but also more sensitive to hidden errors and uncertainties. When there exists no well traded "underlying" security, the B-S is useless and Lattice is the way to go. But where B-S is applicable, I think that it is almost universially prefered.
It's not fascism when the government does it.
“We must spend now as an investment for the future.” - President Obama