Taleb’s Turkey

19 Mar

There is an fascinating conversation on YouTube between Nassim Taleb and Danial Kahneman, link below. The conversation between the philosopher Taleb and the psychologist Danial Kahneman is focused on Taleb’s research and ideas on the topic of Antifragiltiy- systems which become stronger when stressed.

Taleb’s work has long focused on the vulnerabilities humans create by believing the future can be predicted and planned for with certainty, along with the vulnerabilities caused by the models and statistics which are used to create these predictions. Faith, he argues, has moved away from traditional institutions, and is now placed increasingly in economists, bankers and allied professions such as futurologists, but the psychology is still the same; moving the management of risk away from the individual and their experiance, and instead placing it in the hands of dubious organisations and self appointed gurus. To illustrate this point Taleb talks about the life of a turkey owned and reared by a butcher with Thanks Giving approaching, I’ll paraphrase the story below.

The Turkey is well looked after and well fed everyday. Each passing day increases the statistical significance that tomorrow will play out exactly the same. The turkey grows increasingly confident in his future. That is until 2 days before Thanks Giving and the turkey’s statistical department is completely blindsided by a black swan event, one from which the turkey will never recover. Taleb advises us not to be turkeys, not to look into the past and believe this will tell us the future. It is of course a decent guide, but over weighting it’s role in prediction can leave us in the same position as the turkey.

Kahneman counters this example by arguing that to not think like a turkey requires a psychology people aren’t entirely comfortable with. People like order and predictability, and the turkey enjoyed a very good life up until 2 days before Thanks Giving. With that in mind, is it so wrong to think like a turkey?

Kahneman is clearly right, the turkey did enjoy a great life before his demise. However, the Thanks Giving scenario is the best case scenario the turkey could have hoped for. With all his future options owned by the butcher, the turkey could have been given away on a whim, slaughtered early for a friend, or even given away as a pet to a poor owner, all before Thanks Giving arrived. It might be ok to live like a turkey, if you like it, but it’s probably not a good idea to have all your future options owned by events, systems, and organisations which are completely out of your control.

Reading

http://youtu.be/MMBclvY_EMA”>http://youtu.be/MMBclvY_EMA

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