How to Make Money in a Financial Market

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If it is all measurable, say you ask a subject how much he would pay to insure a one % probability of losing a hundred dollars. You are trying to figure out how much he is overpaying for risk oversion. But you cannot ignore all the other financial risks heis taking. And there is a pyramid offof ruined risks. My ruin is not the big deal. I reduce my lefpecnacy, i think, you know, ive listened to your podcast, extends life. So if e bettors can live another 50 years by reducing their life expectancys - that's a big benefit in terms of cost and benefits. The point was that humanity should survive

Nassim Nicholas Taleb, author of Skin in the Game, talks with EconTalk host Russ Roberts about the ideas in the book. This is the third episode of EconTalk with Taleb related to the general topic of skin in the game and how it affects decision-making and policy in an uncertain world. This episode focuses on rationality, religion, and the challenge of thinking about probability and risk correctly in a dynamic world.