Author of quotes: Nassim Nicholas Taleb. Page 2

To survive, the institution must convince yourself and others that it has the "vision".

Scholarship without erudition and natural curiosity leads to narrow thinking and the fragmentation of disciplines.

When an economist fails to predict the next crisis, he often writes off all on an earthquake or a revolution, stating that he is not an expert on geodesy, meteorology and political science, is to integrate these areas in their research and to recognize that his region cannot exist in isolation from the other.

The problem is that we focus on those rare cases where our method works, and almost never - numerous examples of failure.

The most interesting analysis of how academic methods work in real life, was carried out by Spyros Makridakis. He arranged the competition forecasters, using the so-called econometrics - the "scientific method" that connects economic theory with statistical measurements. Simply put, Makridakis people were made to predict in real life, and then evaluated the accuracy of their predictions. With Michelle Hibon he spent a few "M-events"; the third and last of them, M-3 - was completed in 1999. Makridakis and Hibon came to a sad conclusion: "the Newest and most complex statistical methods do not have achieved more accurate results than the simple".

We humans are victims of an asymmetry in the perception of random events. We attribute our successes to their mastery, and failures - external events beyond our control. Namely, accidents. We take responsibility for the good, but not bad. This allows us to think that we are better than others - no matter what we are doing. For example, 94 percent of Swedes believe that are included in 50 percent of Swedish drivers; 84 percent of French believe their sexual abilities provide them a place in the top half of the rating of French lovers.
Another consequence of this asymmetry is that we feel to a certain extent unique from anyone else (because they are, in our view, this asymmetry does not apply).

Tetlock studied the problem of "experts" in politics and Economics. He asked experts from different fields to estimate the probability that during a given time period (about five years) there will be certain political, economic and military events. At the exit he was about twenty-seven thousand predictions of almost three hundred professionals. Economists accounted for about a quarter of the sample. The study found that the experts went far beyond the limits of their tolerances for error. It was discovered and the expert problem: between the results of the doctors and students there was no difference. Professors with extensive list of publications, coped no better than the journalists. The only pattern that is found Tetlock was the inverse dependence of the forecast from the reputation: the owners of the big names predicted worse than those who have not got.
But Tetlock set ourselves the task not so much to show what really are the experts (although he did a great job), but find out why before they did not realize that they do not do their job, in other words, how they manage to "RUB points".
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You say you played another game. Let's say you failed to predict the sudden collapse of the Soviet Union (didn't see this coming no sociologist). It is easy to say that you perfectly understood the essence of political processes in the Soviet Union, but the Russian, being overly Russian, artfully concealed significant economic components. If you possess these economic data, you would have certainly failed to predict the fall of the Soviet regime. We must not blame your qualifications. You can also do if you have predicted a decisive victory of al Gore over George W. Bush. You didn't know that the economy is in such dire Straits; indeed, this fact seems to have been a mystery to all. You're not an economist, but a struggle, it turns out, was economic the ring.
You just blame it on unforeseen circumstances. Happened something extraordinary, outside of your field of science. Since it was impossible to predict, you are not to blame. It was a Black Swan, and you are not required to predict Black swans.

Bull showed me an amazing research work, has just finished his trainee and already accepted for publication; it is considered in detail by two thousand predictions made by securities analysts. The work clearly showed that these broker-analysts did not predict anything: the naive forecast of a person, simply transferring the numbers from the past period to the next would be slightly worse. But analysts have information about orders, forthcoming contracts, and planned expenditures and due to this valuable knowledge seems to predict much better than our naive predictor that does not hold any information except past data. Worse, the gap between predicted and actual values was more substantial than between different predictions and, therefore, analysts led the herd instinct. Otherwise, the predictions have defended from each other as they are separated from reality.

Several researchers studied the work and the self-esteem of analysts of securities, got amazing results, especially in relation to epistemic arrogance of these figures. Comparing them with the meteorologists predicting the weather, Tyszka Tadeusz and Piotr Zielonka concluded that analysts predict the worse, but have more faith in their own ability. In any case, they lack the aplomb not to reduce the margin of error after blatant failures.

Forecasters of the economy, as we will soon verify, much closer in their guesses to each other than to the actual result. No one wants to be the black sheep.

It's not how seldom we are mistaken, and what is the margin of error.

Self-delusion is indeed an important factor. That's the essence of the problem of specialists: they don't know what they don't know. Lack of knowledge and misinformation about the quality of that knowledge go hand in hand - the same mechanism that prevents people to learn more, inspire them the satisfaction of their knowledge.

Global wars in the history of mankind was not enough; they are for us is new, so we tend to underestimate their duration and overestimate their superiority. Remember how I underestimated the duration of the war in Lebanon. The first world also seemed to be a piece of cake to those who started it. So it was with the Vietnam war, and the war in Iraq, but almost every armed conflict of the present.

In areas where everything is mobile and therefore requires the awareness of professionals usually do not happen, whereas in stable areas some experts are. In other words, specialists virtually does not exist in the professions dealing with the future and building their calculations on the basis of studying non-repeating of the past (with the exception of meteorology and those businesses that are determined by short-term physical, not socio-economic processes).