Introduction

4min Snip

00:00

Play full episode

Summary

Transcript

Episode notes

Nasim nicholas, author of fooled by randomnes and the black swan. Nicholas: We don't know much about rare events because they're rare. The smaller the probability, in some areas, weare going to have the larger impact. i call fat tailed domains a big impact, and we don't know how to estimate them.

Nassim Taleb talks with EconTalk host Russ Roberts about the financial crisis, how we misunderstand rare events, the fragility of the banking system, the moral hazard of government bailouts, the unprecedented nature of really, really bad events, the contribution of human psychology to misinterpreting probability and the dangers of hubris. The conversation closes with a discussion of religion and probability.