Comments on: Black Swans, Risk Management, and Undersea Cables http://www.rethinkingmarkets.org/2008/02/06/black-swans-risk-management-and-undersea-cables.html Economic Sociology from the Ground Up Fri, 30 Sep 2011 15:24:01 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Yuval http://www.rethinkingmarkets.org/2008/02/06/black-swans-risk-management-and-undersea-cables.html#comment-52 Yuval Tue, 12 Feb 2008 16:57:10 +0000 http://rethinkingmarkets.org/2008/02/06/black-swans-risk-management-and-undersea-cables.html#comment-52 Peter, as you rightly point out, organisational theory can help us to re-evaluate the validity of the impact x probability framework. One of the clear (but easily ignored) points is that an ‘event’ is not a discrete occurrence, but is often a set of occurrences, connected ex-post by specific observers who were affected in a certain manner by these events. Hence, impact is ‘tailored’ and is not independent of the events. Notwithstanding, Taleb is a bold thinker who produces refreshing insights. Peter, as you rightly point out, organisational theory can help us to re-evaluate the validity of the impact x probability framework. One of the clear (but easily ignored) points is that an ‘event’ is not a discrete occurrence, but is often a set of occurrences, connected ex-post by specific observers who were affected in a certain manner by these events. Hence, impact is ‘tailored’ and is not independent of the events. Notwithstanding, Taleb is a bold thinker who produces refreshing insights.

]]> By: Peter http://www.rethinkingmarkets.org/2008/02/06/black-swans-risk-management-and-undersea-cables.html#comment-51 Peter Mon, 11 Feb 2008 13:30:32 +0000 http://rethinkingmarkets.org/2008/02/06/black-swans-risk-management-and-undersea-cables.html#comment-51 I've been waiting for you then (ie someone else who's read the book, not just the title) - why do conditions of diversity, independence, decentralization, and aggregation have to exist for the crowd to be wise? I mean, I get that experimentally, these conditions seems to apply (though I don't even know if this is true, per <a href="http://crookedtimber.org/2004/08/19/the-wisdom-of-sticks/" rel="nofollow">the wisdom of sticks</a>). Is it just Hayek for web 2.0? I just don't get, theoretically, <em>why</em> any of this should work, and books and papers later, I'm not convinced anyone else does either... I’ve been waiting for you then (ie someone else who’s read the book, not just the title) – why do conditions of diversity, independence, decentralization, and aggregation have to exist for the crowd to be wise? I mean, I get that experimentally, these conditions seems to apply (though I don’t even know if this is true, per the wisdom of sticks). Is it just Hayek for web 2.0? I just don’t get, theoretically, why any of this should work, and books and papers later, I’m not convinced anyone else does either…

]]> By: brayden http://www.rethinkingmarkets.org/2008/02/06/black-swans-risk-management-and-undersea-cables.html#comment-50 brayden Mon, 11 Feb 2008 05:20:41 +0000 http://rethinkingmarkets.org/2008/02/06/black-swans-risk-management-and-undersea-cables.html#comment-50 Re Surowiecki: I have a very different reading of the book than you do, although my take on Taleb is roughly the same. I read Wisdom of the Crowds as arguing that crowds are quite often dumb and maybe even usually dumb. His first chapter praises crowds as being capable of discerning truth and counting jelly beans, etc., but the rest of the book is all about specifying the conditions under which crowd wisdom should hold, which it turns out is not very often. His title is what sells the book, but the devil is in the details. Re Surowiecki: I have a very different reading of the book than you do, although my take on Taleb is roughly the same. I read Wisdom of the Crowds as arguing that crowds are quite often dumb and maybe even usually dumb. His first chapter praises crowds as being capable of discerning truth and counting jelly beans, etc., but the rest of the book is all about specifying the conditions under which crowd wisdom should hold, which it turns out is not very often. His title is what sells the book, but the devil is in the details.

]]> By: Peter http://www.rethinkingmarkets.org/2008/02/06/black-swans-risk-management-and-undersea-cables.html#comment-49 Peter Thu, 07 Feb 2008 11:26:44 +0000 http://rethinkingmarkets.org/2008/02/06/black-swans-risk-management-and-undersea-cables.html#comment-49 Fair enough. It's kind of how the left blogosphere can't get enough of discussing Liberal Fascism, it is interesting and easy to find counter-examples. A while ago I was thinking about (and probably doing) a series on 'when crowds are stupid', per the Surowiecki. Your suggestion shall be heeded. Fair enough. It’s kind of how the left blogosphere can’t get enough of discussing Liberal Fascism, it is interesting and easy to find counter-examples. A while ago I was thinking about (and probably doing) a series on ‘when crowds are stupid’, per the Surowiecki.

Your suggestion shall be heeded.

]]> By: whiteswan http://www.rethinkingmarkets.org/2008/02/06/black-swans-risk-management-and-undersea-cables.html#comment-48 whiteswan Thu, 07 Feb 2008 09:17:38 +0000 http://rethinkingmarkets.org/2008/02/06/black-swans-risk-management-and-undersea-cables.html#comment-48 Can we all agree to please stop. talking. about. Taleb? Nuttin there. Nuff said. Can we all agree to please stop. talking. about. Taleb? Nuttin there. Nuff said.

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