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EconTalk

Luca Dellanna on Risk, Ruin, and Ergodicity

May 29, 2023
Luca Dellanna, an insightful author and consultant known for his expertise on risk and ergodicity, delves into the significance of avoiding ruin when navigating life's uncertainties. He discusses the intricate relationship between risk-taking and career longevity, using professional skiing as a backdrop. The conversation highlights the need for ethical approaches to risk management, touching on the dangers of artificial intelligence and pandemics. Dellanna emphasizes the importance of understanding variance in decision-making and the value of learning from failures to foster growth.
01:07:31

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

  • Considering time horizons and risk taking is crucial in decision-making
  • Understanding and managing non-ergodic processes is important in various areas of life

Deep dives

The Importance of Time Horizons and Risk Taking

One of the main ideas discussed in this podcast episode is the importance of considering time horizons and risk taking when making decisions. The example of professional skiers is used to illustrate that it's not always the fastest skier who wins a race but also the skier who avoids career-ending injuries. The speaker emphasizes that optimal risk-taking strategies depend on the desired time horizon and goals. For those aiming to have a long and successful career, it is necessary to manage risks differently than those aiming for short-term success. This perspective challenges the assumption that winning or performing well can be solely achieved within a short time frame.

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