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Comment by TTPrograms | Hacker News Reader

For a post on a blog presumably focused on statistics the author seems oddly concerned with a model that predicts odd events as being "possible". The difference between "possible" and "impossible" is \eps << 1 - there's no real distinction to be made there in practical statistical terms.

Likewise asserting that California with a 3% chance of going Trump is absurd is an unreasonable degree of overconfidence. Assuming maximizing expected return, the author is implying that they would be willing to take a bet that Trump would lose California with odds >> 97::3, i.e. presumably they would take a bet where I bet $1 to every $99 they bet. To be critical of a model based on outcomes it predicts with tiny probability you need truly remarkably biased priors.

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I don't know if I'm reading your comment wrong but I would happily take that bet- I think most people would. Want to make it? The election result of California isn't a matter of probability; it's an empirical matter that the number of people who will vote for Biden in California far exceeds the number that will vote for Trump.

To you and the other comment - as much as I dislike Taleb's rhetoric, this is precisely the sort of bet he has made a lot of money on. People round rare event probability down to zero, and if you bet against them enough with sufficiently extreme odds you'll eventually (and in expectation) hit a home run.

I would be more than happy to make this bet with anyone willing to take the other side - as in literally, find a modern middle-man system and I'm game.

You may want to be aware that you have provided me a nontrivial arbitrage opportunity, as the odds on predictit are closer to 7:93 : https://www.predictit.org/markets/detail/6611

But would Taleb specifically make a one time bet on one particular Black swan? Isn’t the idea the same as venture capitalism, where this idea only works if you do it with all possible black swans?

You’d have to be crazy to take this one specific bet, you can only realistically take all possible improbable bets.

Choosing to engage in these sorts of bets systematically exclusively and not individually only makes sense if you're not maximizing expected return. You also don't know if I engage in these sorts of bets systematically.

I'll take that exact bet for you. I like those odds because I know that the chance of california going red is effectively 0

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