black swan – kahneman and taleb speak
Taleb in conversation with Kahneman on the banking crisis. Unlike most stuff out there, these guys talk in easy terms about the historic and social roots of how banks work.
Topics include — hindsight biases, the illusion of patterns, perception of risk, and denial. Taleb says he learned many things from the great psychologist Kahneman including:
People take risks because they are ignorant of the odds and are cowards.
People would rather make 100 times a dollar than make a 100 dollars right away, but they would rather incur a huge loss once than make a series of losses.
You can’t trust humans with information.
More radically, he says that even today medical practitioners kill more people than they help. And that there was a very long period in history in which physicians knew their practices were killing people. His great understated exclamation, how can medicine fool people for 13 centuries?
From the website:
DANIEL KAHNEMAN is Eugene Higgins Professor of Psychology, Princeton University, and Professor of Public Affairs, Woodrow Wilson School of Public and International Affairs. He is winner of the 2002 Nobel Prize in Economic Sciences for his pioneering work integrating insights from psychological research into economic science, especially concerning human judgment and decision-making under uncertainty. NASSIM NICHOLAS TALEB, essayist and former mathematical trader, is Distinguished Professor of Risk Engineering at New York University’s Polytechnic Institute. He is the author of Fooled by Randomness and the international bestseller The Black Swan.