Monday, November 11, 2013

Opacity

Nassim Nicholas Taleb again.
Opacity: 143 The error about the error (Fukushima, again)

An error rate can be measured. The measurement, in turn, will have an error rate. The measurement of the error rate will have an error rate. The measurement of the error rate will have an error rate. We can use the same argument by replacing "measurement" by "estimation" (say estimating the future value of an economic variable, the rainfall in Brazil, or the risk of a nuclear accident). What is called a regress argument by philosophers can be used to put some scrutiny on quantitative methods or risk and probability. The mere existence of such regress argument will lead to two different regimes, both leading to the necessity to raise the values of small probabilities, and one of them to the necessity to use power law distributions.

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