5.0 out of 5 stars Excellent exposition of overcompensation, December 9, 2012
By N N Taleb “Nassim N Taleb”
This review is from: The Hour Between Dog and Wolf: Risk Taking, Gut Feelings and the Biology of Boom and Bust Hardcover
I read this book after completing my exposition of overcompensation, how a stressor or a random event causes an increase in strength, in excess of what is needed, like a redundancy. I was also looking for evidence of convex reaction to stressor, or the effect of a mathematical property called Jensen’s inequality in domains and found it exposed here in other words, why a combination low dose most of the time and high dose rarely beats medium dose all the time. The authors presents the evidence for the phenomenon in the following: 1 acute stressors cum recovery beat both absence of stressors and chronic ones; 2 stressors make one stronger post traumatic growth; 3 risk management is mediated by the deep structures in us, not rational decision-making; 4 winning causes an increase in strength the latter are more complicated effects of convexity\/Jensen’s Inequality.Great book. I ignored the connection to financial markets while reading it. But I learned that when under stress, one should seek the familiar.Bravo!<\/p>\n