The Black Swan: The Impact of the Highly Improbable

Certification vs, true skills or knowledge:see donhardt (2004). there is also a franchise protection. Mathematics may not be so necessary a tool for economics, except to protect the franchise of those economists who know math. In my father’s days, the selection process for the mandarins was made using their abilities in Latin (or Greek). So the class of students groomed for the top was grounded in the classics and knew some interesting subjects. They were also trained in Cicero’s highly probabilistic view of things—and selected on erudition, which carries small side effects. If anything it allows you to handle fuzzy matters. My generation was selected according to mathematical skills. You made it based on an engineering mentality; this produced mandarins with mathematical, highly structured, logical minds, and, accordingly, they will select their peers based on such criteria. So the papers in economics and social science gravitated toward the highly mathematical and protected their franchise by putting high mathematical barriers to entry. You could also smoke the general public who is unable to put a check on you. Another effect of this franchise protection is that it might have encouraged putting “at the top” those idiot-savant-like researchers who lacked in erudition, hence were insular, parochial, and closed to other disciplines.

Freedom and determinism:a speculative idea in penrose (1989) where only the quantum effects (with the perceived indeterminacy there) can justify consciousness.

Projectibility:uniqueness assuming least squares or MAD.

Chaos theory and the backward/forward confusion:laurent firode’s Happenstance, a.k.a. Le battement d’ailes du papillonI The Beating of a Butterfly’s Wings (2000).

Autism and perception of randomness:see williams et al. (2002).

Forecasting and misforecasting errors in hedonic states:wilson, meyers, and Gilbert (2001), Wilson, Gilbert, and Centerbar (2003), and Wilson et al. (2005). They call it “emotional evanescence.”

Forecasting and consciousness:see the idea of “aboutness” in dennett (1995, 2003) and Humphrey (1992). However, Gilbert (2006) believes that we are not the only animal that forecasts—which is wrong as it turned out. Suddendorf (2006) and Dally, Emery, and Clayton (2006) show that animals too forecast!

Russell’s comment on Pascal’s wager:ayer (1988) reports this as a private communication.

History:carr (1961), hexter (1979), and Gaddis (2002). But I have trouble with historians throughout, because they often mistake the forward and the backward processes. Mark Buchanan’s Ubiquity and the quite confused discussion by Niall Ferguson in Nature. Neither of them seem to realize the problem of calibration with power laws. See also Ferguson, Why Did the Great War?, to gauge the extent of the forward-backward problems.

For the traditional nomological tendency, i.e., the attempt to go beyond cause into a general theory, see Muqaddamah by Ibn Khaldoun. See also Hegel’s Philosophy of History.

Emotion and cognition:zajonc (1980, 1984).

Catastrophe insurance:froot (2001) claims that insurance for remote events is overpriced. How he determined this remains unclear (perhaps by backfitting or bootstraps), but reinsurance companies have not been making a penny selling “overpriced” insurance.

Postmodernists:postmodernists do not seem to be aware of the differences between narrative and prediction.

Luck and serendipity in medicine:vale et al. (2005). in history, see Cooper (2004). See also Ruffle (1977). More general, see Roberts (1989).

Affective forecasting:see gilbert (1991), gilbert et al. (1993), and Montier (2007).

CHAPTERS 14-17

This section will also serve another purpose. Whenever I talk about the Black Swan, people tend to supply me with anecdotes. But these anecdotes are just corroborative: you

need to show that in the aggregate the world is dominated by Black Swan events. To me,

the rejection of nonscalable randomness is sufficient to establish the role and significance

of Black Swans.

Matthew effects:see Merton (1968, 1973a, 1988). Martial, in his Epigrams: “Semper pauper eris, si pauper es3 Aemiliane./Dantur opes nullis (nunc) nisi divitibus.” (Epigr.v 81). see also Zuckerman (1997, 1998).