Monthly Archives: June 2012

Tyler Cowen – Black Swans

Dave Lull sent this link in. I like Tyler Cowen. He’s a smart cookie. I know him from various interviews over at EconTalk. I always wondered what he looked like, as he has an oddish way of speaking.
I would hazard to guess, based on this video, that he hasn’t spent a lot of time with Taleb’s work. Implicit in my understanding of a Black Swan is the size of the impact. An anomalous chess move wouldn’t qualify, to my way of thinking, as a Black Swan. The notion of a Grey Swan might have also helped him describe the benefits of studying history.

 

 

TO AGE IN REVERSE…

TO AGE IN REVERSE (time, fragility, etc.)

Time to get more technical, so a distinction is helpful at this stage. Let us separate the perishable (humans, single items) from the nonperishable, the potentially perennial. The nonperishable is anything does not have an organic unavoidable expiration date. The perishable is typically an object, the nonperishable has an informational nature to it. A single car is perishable, but the automobile as a technology has survived about a century (and we will speculate should survive another one). Humans die, but their genes —a code — do not necessarily do. The physical book is perishable —say a specific copy of the Old Testament —but its contents are not can they can be expressed into another physical book.

Let me express my idea in Lebanese dialect first. When you see two humans, one young and the other one old, you can bet that the young will survive the elder. With something non perishable, say a technology, it is not the case. We have two possibilities: either both are expected to have to same additional life expectancy (the case in which the probability distribution is called exponential), or the old is expected to have a longer expectancy than the young, in proportion to their relative age. In that situation, if the old is eighty and the young is ten, the elder is expected to live eight times as long as the younger one.

via TO AGE IN REVERSE… | Facebook.

Antifragility – Gaining from Disorder – Value Research: The Complete Guide to Mutual Funds

While we’ll have to wait for the release of the book to read about Antifragility in detail, Taleb’s prologue says something very interesting about the prevalence of fragility in the world today. Here’s what he writes: While in the past people of rank or status were those and only those who took risks, had the downside for their actions and heroes were those who did so for the sake of others, today the exact reverse is taking place. We are witnessing the rise of a new class of inverse heroes, that is, bureaucrats, bankers, Davos-attending fakes, and academics with too much power, and no real downside and accountability. They game the system while citizens pay the price. At no point in history have so many non-risk-takers, that is, those with no personal exposure, exerted so much control.

via Antifragility – Gaining from Disorder – Value Research: The Complete Guide to Mutual Funds. HatTip to Dave Lull.