Ergodicity
The average outcome across many players is not the outcome one player gets moving through time; where ruin is possible the time average is ruin whatever the expected value says. Before computing odds, ask whether repeated play can take you to zero. Kelly-style sizing exists precisely to stop a positive-expectation bet from becoming a losing life.
5 books · 2 people behind it · 4 resources
Start here
- Fooled by RandomnessNassim Nicholas Taleb, 2001
- Skin in the GameNassim Nicholas Taleb, 2018
- Fortune's FormulaWilliam Poundstone, 2005
The people behind it 2
Each person holds a book in this entry or names it in their own tags.
Academics 1
Journalists 1
Resources 4
- Multiplicative SystemsShane Parrish · essay · One zero in the chain sets the whole product to zero.
- The Precautionary PrincipleShane Parrish · essay · Where ruin is possible, expected value is the wrong test.
- Getting Wealthy vs. Staying WealthyMorgan Housel · essay · Survival is the precondition for compounding.
- The Value of Probabilistic ThinkingShane Parrish · essay · Bayesian updating, fat tails and asymmetries together.
