Probability and Risk in the Real World [pdf] • Hacker News Board

stiff wrote: post #5

Crank science time! What I think he is doing, he is basically taking his philosophical musings, finds concepts from very high level mathematics that seem corresponding, buries it all under a mountain of formalism introduced for no particular reason and then... does absolutely nothing with it. He will plug in some numbers or show some trivial (except for the mountain of formalism) inequality as a supposed mathematical…

You have a point (his style, which you summarized well, grates on me too[1]). But there are not enough people pointing to the consequences of important systems in our society that, from a risk point of view, are accidents waiting to happen. We act like we understand them, but we actually understand them just well enough to be dangerous.

One general casting of the "problem" is -- systems with potentially-large downside risk in which the risk is externalized to society at large, or to the future, but the principal actors are largely insulated from that risk. (Finance, of course, but also biological experimentation, climate change, nuclear technology.)

Taleb doesn't cover all the bases, but I interpret that to mean that we need more voices addressing this problem. It would be smart of Taleb to identify and cite them instead of trying to invent an analysis formalism himself. But, we can't have everything.

([1] I'm familiar with measure-theoretic probability, and one author of the paper he criticizes in the extended footnote on page 6 was on my PhD committee. This is why I'm sympathetic to the problems you've identified in his writing.)

Re: Probability and Risk in the Real World [pdf]

#16

Post by stiff » Mon, Sep 23, 2013, 7:18 PM UTC

oskarth wrote: post #10

stiff wrote: post #9

Earlier quoted context omitted.

The thing with cranks is that there is really nothing to criticize, the words just don't make any sense - terminology is misused or invented and not explained, formalism is introduced without apparent reason, established best practices for communication are not followed (like stating your objectives and conclusions from your work) and so forth. I mean, what the hell is this supposed to mean I can't even imagine: Defi…

His attitude on academica and proofs are different from most contemporary researchers/scholars, something that he has talked about extensively in his books and other writings. Being well-read in the classics and spending a lot of his time on the trade floor probably has something to do with it. As hackers I think this attitude isn't that far off, when it comes to the hacker/compsci "divide". While I see your point ab…

Can you give me an example of a rule that is true ("holds across a broad range of environments") and the truth of which does not depend on a "specific (and closed) set of assumptions"? How does one arrive at "rules" like this using mathematics? I think that's quite a revolution in the foundations of mathematics...

Re: Probability and Risk in the Real World [pdf]

#17

Post by tensor » Mon, Sep 23, 2013, 7:23 PM UTC

oskarth wrote: post #10

stiff wrote: post #9

Earlier quoted context omitted.

The thing with cranks is that there is really nothing to criticize, the words just don't make any sense - terminology is misused or invented and not explained, formalism is introduced without apparent reason, established best practices for communication are not followed (like stating your objectives and conclusions from your work) and so forth. I mean, what the hell is this supposed to mean I can't even imagine: Defi…

His attitude on academica and proofs are different from most contemporary researchers/scholars, something that he has talked about extensively in his books and other writings. Being well-read in the classics and spending a lot of his time on the trade floor probably has something to do with it. As hackers I think this attitude isn't that far off, when it comes to the hacker/compsci "divide". While I see your point ab…

I haven't read the book, but your justifications here send up as many red flags as the quote you are addressing. First, a proof is either valid or it is not. You cannot have a "different view" on this. Second, there is no hacker/compsci divide. Terms like 'the real world' are used solely to demean the work of another person and offer nothing useful.

Your example is especially frightening. You cannot build proofs on weak rules-of-thumb. In fact, it is difficult to even quantify values surrounding heuristics like the one you give. There simply is no valid data.

Re: Probability and Risk in the Real World [pdf]

#18

Post by Tycho » Mon, Sep 23, 2013, 7:50 PM UTC

stiff wrote: post #9

oskarth wrote: post #7

Earlier quoted context omitted.

He got his PhD in the pricing of derivatives, and wrote the book Dynamic Hedging almost 20 years ago, far before he started with his so called "philosophical musings". If you are gonna criticize someone, it would be better to criticize something that person has said rather than calling him a crank. That aside, the book you posted seems interesting indeed. http://www.amazon.com/Dynamic-Hedging-Managing-Vanilla-Optio..…

The thing with cranks is that there is really nothing to criticize, the words just don't make any sense - terminology is misused or invented and not explained, formalism is introduced without apparent reason, established best practices for communication are not followed (like stating your objectives and conclusions from your work) and so forth. I mean, what the hell is this supposed to mean I can't even imagine: Defi…

What was wrong with his statement about theorems?