Very technical, very important: Three researchers managed to unify antifragility and conflation the green lumber problem in a single measure information geometry.
http://www.fooledbyrandomness.com/bmn.pdf
via 2 Very technical,….
Rule 5: Decision makers must have skin in the game.
At no time in the history of humankind have more positions of power been assigned to people who don’t take personal risks. But the idea of incentive in capitalism demands some comparable form of disincentive. In the business world, the solution is simple: Bonuses that go to managers whose firms subsequently fail should be clawed back, and there should be additional financial penalties for those who hide risks under the rug. This has an excellent precedent in the practices of the ancients. The Romans forced engineers to sleep under a bridge once it was completed.
Because our current system is so complex, it lacks elementary clarity: No regulator will know more about the hidden risks of an enterprise than the engineer who can hide exposures to rare events and be unharmed by their consequences. This rule would have saved us from the banking crisis, when bankers who loaded their balance sheets with exposures to small probability events collected bonuses during the quiet years and then transferred the harm to the taxpayer, keeping their own compensation.
In these five rules, I have sketched out only a few of the more obvious policy conclusions that we might draw from a proper appreciation of antifragility. But the significance of antifragility runs deeper. It is not just a useful heuristic for socioeconomic matters but a crucial property of life in general. Things that are antifragile only grow and improve under adversity. This dynamic can be seen not just in economic life but in the evolution of all things, from cuisine, urbanization and legal systems to our own existence as a species on this planet.
via Learning to Love Volatility: Nassim Nicholas Taleb on the Antifragile – WSJ.com.
HatTip to Dave Lull
A 3 sentence rebuttal of a >2000 words piece by Pinker.
http://www.fooledbyrandomness.com/pinkerrebuttal.pdf
And the 3 sentences:
Pinker’s Rebuttal of My Note
Nassim Nicholas Taleb
Pinker has written a rebuttal (ad hominem blather, if he had a point he would have written something 13 of my comment, not 3 x the words). He
still does not understand the difference between probability and expectation (drop in observed volatility/fluctualtion ¹≠ drop in risk) or the incompatibility of his claims with his acceptance of fat tails (he does not understand asymmetries from his posts on FB and private correspon- dence). Yet it was Pinker who said “what is the actual risk for any individual? It is approaching zero”.
Let the book tour begin! And you know that means lots of new audio coming as well.
HatTip to Dave Lull
Antifragile: Things That Gain from Disorder
In his global bestseller The Black Swan, Nassim Nicholas Taleb argued that rare, unpredictable events (“black swans”) have the greatest impact on our lives – and that our blindness to these random events has a price. Now he returns with Antifragile, a bold book explaining how and why we should embrace uncertainty, randomness, and error as an antidote to our fragile way of life, instead of trying to avoid mistakes and collapsing when catastrophe strikes (see 2008). It may just change our lives.
“The hottest thinker in the world.”
– London TimesStandard: $25 | Members $20 | Students $15
Premium*: $45 | Members $40
*A copy of Antifragile is included in Premium ticket price.Tuesday, Dec 11
Starts at: 7:00 pm
AMAZON & THE TRUTHFULNESS of THE AMATEUR
When The Black Swan came out, the first NYT reviewer Gregg Easterbrook, a professional journalist was clueless and had not read the book nor did he understand much of it… Same with other reviews by academics who skimmed the book and found some angle that links it to what research tradition they knew worse, academics tend to be envious of other writers as I can predict a review from the name of its author … Professionals cut corners and work from secondary sources or within agendas and scan books for familiarity with prevailing concepts; so it took a while for the real ideas of TBS to percolate. Because of the journalistic distortions people believed my book was about forecasting Black Swans, etc., not about epistemic opacity and perceptional distortions etc.This time, 5 3/4 years later Amazon sent the galleys of the new book to members of the VINE program for trusted and genuine readers who review books for free. They can get things wrong, but the crowdsourcing works, supplying both DEPTH and VARIATIONS of opinions, provided such advanced reviewing is limited to those who are deemed reliable by their ratings.
And the author can respond on premises.
This insulates us authors from corrupt & paid laborers: academics & journalists.
