Something people don’t realize about fat-tailed probabilities…

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Something people don’t realize about fat-tailed probabilities: We may accept to take risks with .00001 pct chance of blowing up the planet. May be OK for some. But the inconsistency is that we do serially and collectively take A LOT of “one-off” risk. If nothing happens, we may do it again. And again. Or we may take many of these at the same time. Merely allowing such action will eventually mean that we will have 100% chance of blowing up the planet.

Recall the principle, by Kolmogorov’s zero-one law, that eventually if you have a small chance of blowing up you end up blowing up with CERTAINTY; the planet has never blown up (in trillions of trillions of bounded variations over billions of years) precisely because it took close to ZERO risks of blowing up. Nothing beyond local variations.

This seriality is something to add to the precautionary principle. Some risks we should NEVER take.

via Something people don’t realize about… – Nassim Nicholas Taleb | Facebook.

Nassim N Taleb’s review of The Science of Conjecture: Evidence and Probability before Pascal

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The Science of Conjecture: Evidence and Probability before Pascal

5.0 out of 5 stars Indispensable, August 31, 2013

(Review) By N N Taleb “Nassim N Taleb”

This review is from: The Science of Conjecture: Evidence and Probability before Pascal (Paperback)

As a practitioner of probability, I’ve read many book on the subject. Most are linear combinations of other books and ideas rehashed without real understanding that the idea of probability harks back the Greek pisteuo (credibility) and pervaded classical thought. Almost all of these writers made the mistake to think that the ancients were not into probability. And most books such “Against the Gods” are not even wrong about the notion of probability: odds on coin flips are a mere footnote. If the ancients were not into computable probabilities, it was not because of theology, but because they were not into games. They dealt with complex decisions, not merely probability. And they were very sophisticated at it.

This book stands above, way above the rest: I’ve never seen a deeper exposition of the subject, as this text covers, in addition to the mathematical bases, the true philosophical origin of the notion of probability. In addition Franklin covers matters related to ethics and contract law, such as the works of the medieval thinker Pierre de Jean Olivi, that very few people discuss today.

via Amazon.com: N N Taleb “Nassim N Taleb”‘s review of The Science of Conjecture: Evidence and Pr….
HatTip to Dave Lull

Friday’s Quiz. You run into 2 people and are told that the total net worth for both is $30 million…

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Friday’s Quiz. You run into 2 people and are told that the total net worth for both is $30 million. What is the most likely breakdown? Next we will apply that to errors… and GMOs.

via Friday’s Quiz. You run into 2 people and… – Nassim Nicholas Taleb | Facebook.

So far everybody got it. Now you run into 2 people and are told that the total height for both is 2.1 meters 13ft 5 27⁄64in What is the most likely breakdown?

This one is easy, but I will explain how we will get to GMOs…

via So far everybody got it. Now you run… – Nassim Nicholas Taleb | Facebook.

Sorry, sorry, typo. Now you run into 2 people and are told that the total height for both is 4.1 meters 13ft 5 27⁄64in What is the most likely breakdown?

This one is easy, but I will explain how we will get to GMOs…

via Sorry, sorry, typo. Now you run into 2… – Nassim Nicholas Taleb | Facebook.

Now, next step, here is the reason why, for humans, the most likely height is exactly half of the total for large deviations but for unconstrained variables like wealth, the most likely is 30 million/~0 (assuming no debt). Simply, nature has a way to constrain variations.

We are getting close to GMOs, but we need one more step.

http://arxiv.org/pdf/1307.6695v2.pdf

The solution to the Friday quiz is here. Go to page 3, section called “Application”. But the rest of the text shows the background and a more formal difference between Extremistan and Mediocristan.

https://dl.dropboxusercontent.com/u/50282823/fridayquiz.pdf

via The solution to the Friday quiz is here…. – Nassim Nicholas Taleb | Facebook.

via Now, next step, here is the reason why,… – Nassim Nicholas Taleb | Facebook.

This article passed a potent filters: it was posted by 3 people on this site…

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This article passed a potent filters: it was posted by 3 people on this site. Indeed: this is a convex (antifragile) response, benefiting from Jensen’s inequality.
Posted by Pablo Emanuel, Anthony Bishop, and Subhabrata Pal (plus Jed Trott).

Mathematicians have found that by varying the timing of treatments, doctors may be able to increase the odds that a disease outbreak will die off suddenly

via This article passed a potent filters: it… – Nassim Nicholas Taleb | Facebook.