You can read the full essay online here http://www.edge.org/3rd_culture/taleb08/taleb08.1_index.html
Will 2008/11/8 Mike Tintner <[EMAIL PROTECTED]>: > REAL LIFE IS NOT A CASINO > By Nassim Nicholas Taleb > > On New Years day I received a a prescient essay from Nassim Taleb, author of > The Black Swan, as his response to the 2008 Edge Question: "What Have You > Change Your Mind About?" In "Real Life Is Not A Casino", he wrote: > > "I've shown that institutions that are exposed to negative black swans-such > as banks and some classes of insurance ventures-have almost never been > profitable over long periods. The problem of the illustrative current > subprime mortgage mess is not so much that the "quants" and other > pseudo-experts in bank risk-management were wrong about the probabilities > (they were) but that they were severely wrong about the different layers of > depth of potential negative outcomes." > > Taleb had changed his mind about his belief "in the centrality of > probability in life, and advocating that we should express everything in > terms of degrees of credence, with unitary probabilities as a special case > for total certainties and null for total implausibility". > > "Critical thinking, knowledge, beliefs-everything needed to be probabilized. > Until I came to realize, twelve years ago, that I was wrong in this notion > that the calculus of probability could be a guide to life and help society. > Indeed, it is only in very rare circumstances that probability (by itself) > is a guide to decision making. It is a clumsy academic construction, > extremely artificial, and nonobservable. Probability is backed out of > decisions; it is not a construct to be handled in a stand-alone way in > real-life decision making. It has caused harm in many fields." > > The essay is one of more than one hundred that have been edited for a new > book What Have You Changed Your Mind About? (forthcoming, Harper Collins, > January 9th). > > ________________________________ > agi | Archives | Modify Your Subscription ------------------------------------------- agi Archives: https://www.listbox.com/member/archive/303/=now RSS Feed: https://www.listbox.com/member/archive/rss/303/ Modify Your Subscription: https://www.listbox.com/member/?member_id=8660244&id_secret=117534816-b15a34 Powered by Listbox: http://www.listbox.com
