Rational about Rationality You don’t need science to survive, but you need to survive to do science. The best definition of rationality: actions that increase the chances of survival. Herbert Simon formulated the idea of bounded rationality; we can’t deal with the world as if we were a computer – we need shortcuts and distortions … Read more
My lifetime motto is that mathematicians think in (well, precisely defined and mapped) objects and relations, jurists and legal thinkers in constructs, logicians in maximally abstract operators, and…fools in words. Words have ambiguous meanings – this is bad for decision making. Philosophy was born out of the need for rigor in discourse – Socrates asked … Read more
Taleb’s point in Skin in the Game can be summed up with this observation. Anyone who needs to appease his colleagues to make progress, or his superiors, or deal with commentators, will have to take on the role of an actor, and by doing so, they trade results in the real world for their position … Read more
Jesus was a risk taker In Christianity, it would have been easier to separate Jesus from God, but there was an insistence on the Trinity. The duality of Jesus (being both man and God) is central, and has caused monotheists to see traces of polytheism in Christianity and Christians to be beheaded by the Islamic … Read more
The Skin of Employees Employees exist because they have a lot of skin in the game, they share risk with their employers – enough for it prevent them from being undependable. With employees, you are buying dependability. And dependability is a driver behind many transactions. People of some means have a country house—which is inefficient … Read more
An intolerant minority will set the rules for everyone else. People in the U.S eat Kosher food not because most of the U.S is Jewish, but because non-Jews tolerate Kosher while Jews don’t tolerate non-Kosher. This asymmetry informs us about what will happen with GMO’s. Companies can promote genetically modified food, but it only takes … Read more
Be careful of taking advice from people with misaligned incentives. If someone advises you to do something that is mutually beneficial, realize they may not care if you end up being harmed. Traders understood this, they did not sell to other professional traders when they had excess inventory to unload – doing so would … Read more
In Book 1, Taleb introduces an outline of his arguments. Hierarchies aren’t so bad Hierarchies are not inherently bad, they are only harmful when they result in bureaucracies that help people separate themselves from the consequences of their decisions. Hierarchies should exist, and if they are localized and decentralized then they would not result in … Read more
The Time Paradox is a book by Phillip Zimbardo and John Boyd that explains how our attitudes towards time shapes the way we live our lives, who we become, and what we value. Boyd recalls a Crypt of the Capuchin Monks that he once saw, it had an inscription at the foot of a pile … Read more
A large proportion of people in the world do not have the ability to choose how they want to spend their time. The global economic machine can only function when sufficient sacrifices are made. What people sacrifice is time, it is the most precious commodity that humans have. Unless you have provided astronomical value to … Read more