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Luca Dellanna on Risk, Ruin, and Ergodicity
EconTalk
The Pyramid of Risk
In manufacturing risk management, there is this principle called the pyramid of risk. It's an idea that comes from the 30s from a German engineer. For each deadly accident, there are a few accidents in which injury was provoked. And for each incident with no injury, there are some near misses where nothing happens.
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