The literature calls it the "pull of the recent," but has difficulty estimating the effects,
owing to disagreements. See Jablonski et al. (2003).
Undiscovered public knowledge: Here is another manifestation of silent evidence: you
can actually do lab work sitting in an armchair, just by linking bits and pieces of research
by people who labor apart from one another and miss on connections. Using
bibliographic analysis, it is possible to find links between published information that
had not been known previously by researchers. I "discovered" the vindication of the
NOTES 3 1 9
armchair in Fuller (2005). For other interesting discoveries, see Spasser (1997) and
Swanson (1986a, 1986b, 1987).
Crime: The définition of economic "crime" is something that comes in hindsight. Regulations,
once enacted, do not run retrospectively, so many activities causing excess are
never sanctioned (e.g., bribery).
Bastiat: See Bastiat (1862-1864).
Casanova: I thank the reader Milo Jones for pointing out to me the exact number of volumes.
See Masters (1969).
Reference point problem: Taking into account background information requires a form
of thinking in conditional terms that, oddly, many scientists (especially the better
ones) are incapable of handling. The difference between the two odds is called, simply,
conditional probability. We are computing the probability of surviving conditional
on our being in the sample itself. Simply put, you cannot compute probabilities
if your survival is part of the condition of the realization of the process.
Plagues: See McNeill (1976).
CHAPTER 9
Intelligence and Nobel: Simonton (1999). If IQ scores correlate, they do so very weakly
with subsequent success.
"Uncertainty": Knight (1923). My definition of such risk (Taleb, 2007c) is that it is a normative
situation, where we can be certain about probabilities, i.e., no metaprobabilities.
Whereas, if randomness and risk result from epistemic opacity, the difficulty
in seeing causes, then necessarily the distinction is bunk. Any reader of Cicero would
recognize it as his probability; see epistemic opacity in his De Divinatione, Liber
primus, LVI, 127:
Qui enim teneat causas rerum futurarum, idem necesse est omnia teneat
quae futura sint. Quod cum nemo facere nisi deus possit, relinquendum
est homini, ut signis quibusdam consequentia declarantibus futura praesentiat.
"He who knows the causes will understand the future, except that, given that nobody
outside God possesses such faculty . . ."
Philosophy and epistemology of probability: Laplace. Treatise, Keynes (1920), de Finetti
(1931), Kyburg (1983), Levi (1970), Ayer, Hacking (1990, 2001), Gillies (2000), von
Mises (1928), von Plato (1994), Carnap (1950), Cohen (1989), Popper (1971),
Eatwell et al. (1987), and Gigerenzer et al. (1989).
History of statistical knowledge and methods: I found no intelligent work in the history
of statistics, i.e., one that does not fall prey to the ludic fallacy or Gaussianism. For a
conventional account, see Bernstein (1996) and David (1962).
General books on probability and information theory: Cover and Thomas (1991); less
technical but excellent, Bayer (2003). For a probabilistic view of information theory:
the posthumous Jaynes (2003) is the only mathematical book other than de Finetti's
work that I can recommend to the general reader, owing to his Bayesian approach
and his allergy for the formalism of the idiot savant.
Poker: It escapes the ludic fallacy; see Taleb (2006a).
Plato's normative approach to left and right hands: See McManus (2002).
Nietzsche's bildungsphilister: See van Tongeren (2002) and Hicks and Rosenberg (2003).
Note that because of the confirmation bias academics will tell you that intellectuals
"lack rigor," and will bring examples of those who do, not those who don't.
Economics books that deal with uncertainty: Carter et al. (1962), Shackle (1961, 1973),
Hayek (1994). Hirshleifer and Riley (1992) fits uncertainty into neoclassical economics.
Incomputability: For earthquakes, see Freedman and Stark (2003) (courtesy of Gur Huberman).
3 2 0 NOTES
Academia and philistinism: There is a round-trip fallacy; if academia means rigor (which
I doubt, since what I saw called "peer reviewing" is too often a masquerade), nonacademic
does not imply nonrigorous. Why do I doubt the "rigor"? By the confirmation
bias they show you their contributions yet in spite of the high number of laboring
academics, a relatively minute fraction of our results come from them. A disproportionately
high number of contributions come from freelance researchers and those
dissingly called amateurs: Darwin, Freud, Marx, Mandelbrot, even the early Einstein.
Influence on the part of an academic is usually accidental. This even held in the Middle
Ages and the Renaissance, see Le Goff (1985). Also, the Enlightenment figures
(Voltaire, Rousseau, d'Holbach, Diderot, Montesquieu) were all nonacademics at a
time when academia was large.
CHAPTER 10
Overconfidence: Albert and Raiffa (1982) (though apparently the paper languished for a
decade before formal publication). Lichtenstein and, Fischhoff (1977) showed that
overconfidence can be influenced by item difficulty; it typically diminishes and turns
into underconfidence in easy items (compare with Armelius [1979]). Plenty of papers
since have tried to pin down the conditions of calibration failures or robustness (be
they task training, ecological aspects of the domain, level of education, or nationality):
Dawes (1980), Koriat, Lichtenstein, and Fischhoff (1980), Mayseless and
Kruglanski (1987), Dunning et al. (1990), Ayton and McClelland (1997), Gervais
and Odean (1999), Griffin and Varey (1996), Juslin (1991, 1993, 1994), Juslin and
Olsson (1997), Kadane and Lichtenstein (1982), May (1986), McClelland and Bolger
(1994), Pfeifer (1994), Russo and Schoernaker (1992), Klayman et al. (1999). Note
the decrease (unexpectedly) in overconfidence under group decisions: see Sniezek and
Henry (1989)—and solutions in Pious (1995). I am suspicious here of the Mediocristan/
Extremistan distinction and the unevenness of the variables. Alas, I found
no paper making this distinction. There are also solutions in Stoll (1996), Arkes
et al. (1987). For overconfidence in finance, see Thorley (1999) and Barber and
Odean (1999). For cross-boundaries effects, Yates et al. (1996, 1998), Angele et al.
(1982). For simultaneous overconfidence and underconfidence, see Erev, Wallsten,
and Budescu (1994).
Frequency vs. probability—the ecological problem: Hoffrage and Gigerenzer (1998)
think that overconfidence is less significant when the problem is expressed in frequencies
as opposed to probabilities. In fact, there has been a debate about the difference
between "ecology" and laboratory; see Gigerenzer et al. (2000), Gigerenzer and
Richter (1990), and Gigerenzer (1991). We are "fast and frugal" (Gigerenzer and Goldstein
[1996]). As far as the Black Swan is concerned, these problems of ecology do not
arise: we do not live in an environment in which we are supplied with frequencies or,
more generally, for which we are fit. Also in ecology, Spariosu (2004) for the ludic aspect,
Cosmides and Tooby (1990). Leary (1987) for Brunswikian ideas, as well as
Brunswik (1952).
Lack of awareness of ignorance: "In short, the same knowledge that underlies the ability
to produce correct judgment is also the knowledge that underlies the ability to recognize
correct judgment. To lack the former is to be deficient in the latter." From Kruger
and Dunning (1999).
Expert problem in isolation: I see the expert problem as indistinguishable from Matthew
effects and Extremism fat tails (more later), yet I found no such link in the literatures
of sociology and psychology.
Clinical knowledge and its problems: See Meehl (1954) and Dawes, Faust, and Meehl
(1989). Most entertaining is the essay "Why I Do Not Attend Case Conferences" in
Meehl (1973). See also Wagenaar and Keren (1985, 1986).
Financial analysts, herding, and forecasting: See Guedj and Bouchaud (2006), Abarbanell
and Bernard (1992), Chen et al. (2002), De Bondt and Thaler (1990), Easterwood
NOTES 3 2 1
and Nutt (1999), Friesen and Weller (2002), Foster (1977), Hong and Kubik (2003),
Jacob et al. (1999), Lim (2001), Liu (1998), Maines and Hand (1996), Mendenhall
(1991), Mikhail et al. (1997,1999), Zitzewitz (2001), and El-Galfy and Forbes (2005).
For a comparison with weather forecasters (unfavorable): Tyszka and Zielonka
(2002).
Economists and forecasting: Tetlock (2005), Makridakis and Hibon (2000), Makridakis
et al. (1982), Makridakis et al. (1993), Gripaios (1994), Armstrong (1978, 1981);
and rebuttals by McNees (1978), Tashman (2000), Blake et al. (1986), Onkal et al.
(2003), Gillespie (1979), Baron (2004), Batchelor (1990, 2001), Dominitz and
Grether (1999). Lamont (2002) looks for reputational factors: established forecasters
get worse as they produce more radical forecasts to get attention—consistent with
Tetlock's hedgehog effect. Ahiya and Doi (2001) look for herd behavior in Japan. See
McNees (1995), Remus et al. (1997), O'Neill and Desai (2005), Bewley and Fiebig
(2002), Angner (2006), Bénassy-Quéré (2002); Brender and Pisani (2001) look at the
Bloomberg consensus; De Bondt and Kappler (2004) claim evidence of weak persistence
in fifty-two years of data, but I saw the slides in a presentation, never the paper,
which after two years might never materialize. Overconfidence, Braun and Yaniv
(1992). See Hahn (1993) for a general intellectual discussion. More general, Clemen
(1986, 1989). For Game theory, Green (2005).
Many operators, such as James Montier, and many newspapers and magazines
(such as The Economist), run casual tests of prediction. Cumulatively, they must be
taken seriously since they cover more variables.
Popular culture: In 1931, Edward Angly exposed forecasts made by President Hoover in
a book titled Oh Yeah? Another hilarious book is Cerf and Navasky (1998), where,
incidentally, I got the pre-1973 oil-estimation story.
Effects of information: The major paper is Bruner and Potter (1964). I thank Danny Kahneman
for discussions and pointing out this paper to me. See also Montier (2007),
Oskamp (1965), and Benartzi (2001). These biases become ambiguous information
(Griffin and Tversky [1992]). For how they fail to disappear with expertise and training,
see Kahneman and Tversky (1982) and Tversky and Kahneman (1982). See
Kunda (1990) for how preference-consistent information is taken at face value, while
preference-inconsistent information is processed critically.
Planning fallacy: Kahneman and Tversky (1979) and Buehler, Griffin, and Ross (2002).
The planning fallacy shows a consistent bias in people's planning ability, even with
matters of a repeatable nature—though it is more exaggerated with nonrepeatable
events.
Wars: Trivers (2002).
Are there incentives to delay?: Flyvbjerg et al. (2002).
Oskamp: Oskamp (1965) and Montier (2007).
Task characteristics and effect on decision making: Shanteau (1992).
Epistèmê vs. Techn?: This distinction harks back to Aristotle, but it recurs then dies?
down—it most recently recurs in accounts such as tacit knowledge in "know how."
See Ryle (1949), Polanyi (1958/1974), and Mokyr (2002).
Catherine the Great: The number of lovers comes from Rounding (2006).
Life expectancy: www.annuityadvantage.com/lifeexpectancy.htm. For projects, I have
used a probability of exceeding with a power-law exponent of 3/2: f= Kxm. Thus the
conditional expectation of x, knowing that x exceeds a
] a f(x)dx
CHAPTERS 11-13
Serendipity: See Koestler (1959) and Rees (2004). Rees also has powerful ideas on forecastability.
See also Popper's comments in Popper (2002), and Waller (2002a), Cannon
3 2 2 NOTES
(1940), Mach (1896) (cited in Simonton [1999]), and Merton and Barber (2004). See
Simonton (2004) for a synthesis. For serendipity in medicine and anesthesiology, see
Vale et al. (2005).
"Renaissance man": See www.bell-labs.com/project/feature/archives/cosmology/.
Laser: As usual, there are controversies as to who "invented" the technology. After a successful
discovery, precursors are rapidly found, owing to the retrospective distortion.
Charles Townsend won the Nobel prize, but was sued by his student Gordon Gould,
who held that he did the actual work (see The Economist, June 9, 2005).
Darwin/Wallace: Quammen (2006).
Popper's attack on historicism: See Popper (2002). Note that I am reinterpreting Popper's
idea in a modern manner here, using my own experiences and knowledge, not commenting
on comments about Popper's work—with the consequent lack of fidelity to
his message. In other words, these are not directly Popper's arguments, but largely
mine phrased in a Popperian framework. The conditional expectation of an unconditional
expectation is an unconditional expectation.
Forecast for the future a hundred years earlier: Bellamy (1891) illustrates our mental projections
of the future. However, some stories might be exaggerated: "A Patently False
Patent Myth still! Did a patent official really once resign because he thought nothing
was left to invent? Once such myths start they take on a life of their own." Skeptical
Inquirer, May-June, 2003.
Observation by Peirce: Olsson (2006), Peirce (1955).
Predicting and explaining: See Thorn (1993).
Poincaré: The three body problem can be found in Barrow-Green (1996), Rollet (2005),
and Galison (2003). On Einstein, Pais (1982). More recent revelations in Hladik
(2004).
Billiard balls: Berry (1978) and Pisarenko and Sornette (2004).
Very general discussion on "complexity": Benkirane (2002), Scheps (1996), and Ruelle
(1991). For limits, Barrow (1998).
Hayek: See www.nobel.se. See Hayek (1945, 1994). Is it that mechanisms do not correct
themselves from railing by influential people, but either by mortality of the operators,
or something even more severe, by being put out of business? Alas, because of contagion,
there seems to be little logic to how matters improve; luck plays a part in how
