1/ "Uncertainty, not risk, is the difficulty regularly before us. That is, we can identify the states of the world, but not their probabilities.
Ignorance arises in a situation where some potential states of the world cannot be identified."
Zeckhauser 25iq.com/2018/09/08/ris…
Ignorance arises in a situation where some potential states of the world cannot be identified."
Zeckhauser 25iq.com/2018/09/08/ris…
2/ "I would argue, ranking alongside uncertainty and above risk. Ignorance achieves its importance, not only by being widespread, but also by involving outcomes of great consequence.” “There is no way that one can sensibly assign probabilities to the unknown states of the world."
3/ Once you internalize Zeckhauser’s mental model you should naturally start to value a margin of safety more highly. You may not always be able to predict, but you can prepare.
Charlie Munger has said about him: “The right way to think is the way Zeckhauser plays bridge."
Charlie Munger has said about him: “The right way to think is the way Zeckhauser plays bridge."
4/ 25iQuiz: Does the future impact of COVID19 belong more within the domain of what Zeckhauser calls: (a) uncertainty or (b) ignorance?
