This is a technical version of the “Masquerade Problem”…

Update 4/8/20.  A reader has pointed out that the pdf this post linked to is no longer valid. They subsequently tweeted to NNT asking how to follow up on the Masquerade Problem and were directed to the recent version of the ‘Technical Incerto’ currently hosted and available to download as ‘Statistical Consequences of Fat Tails: Real World Preasymptotics, Epistemology, and Application’ from https://www.researchers.one/article/2020-01-21. Discussion of the Masquerade Problem starts on page 41 of the current version.

————————————-

This is a technical version of the “Masquerade Problem” in The Black Swan, or how to survive with problem of induction. Remarkably, 7 years later, I have not seen anyone getting it. Hopefully, when presented technically, people may get the point.

Will convert the Chapter into a paper at some point, format in LaTex and put on ArXiv. But comments are welcome.

Thanks in advance

 

2 thoughts on “This is a technical version of the “Masquerade Problem”…

  1. John Post author

    Hi! Unfortunately I don’t have a copy of the madquerade.pdf. But I see that you tweeted NNT and heard back from him. The Masquerade problem is also discussed briefly in The Black Swan @p.266. And from an earlier version of the Technical Incerto I have this brief statement of the problem.

    The gist of the argument is the notion called masquerade problem in The Black Swan.
    A thin-tailed distribution is less likely to deliver a single large deviation than a fat tailed distribution a series of long calm periods.

Leave a Reply

Your email address will not be published. Required fields are marked *