Econoethics.docx - Blanka Jaszczura 34185 The Logic of Risk Taking An article entitled “The logic of risk taking” is written by Nassim Nicholas

Econoethics.docx - Blanka Jaszczura 34185 The Logic of Risk...

This preview shows page 1 - 2 out of 4 pages.

Blanka Jaszczura, 34185 The Logic of Risk Taking An article entitled “The logic of risk taking” is written by Nassim Nicholas Taleb. Taleb is an American economist, philosopher and trader. He is of Lebanese origin. In his publications he focuses on the aspects of probability, uncertainty and fortuity. Currently he is a professor of New York University (Wikipedia, 2018). In the article Taleb focuses on ensemble probability, time probability, …. In the first paragraph author covers the problem of misunderstood probability by comparing and analysing ensemble probability and time probability. To make it more comprehensive, author investigates to potential situations. In first situation he discuss the issue of 100 people going to Casino. He describes that it is possible to calculate the „edge” and see whether the Casino is calculating the chances properly. However, the fact that some gamblers win, and some of them loose is typical for casino. Nevertheless, the situation when one of the gamblers loose, does not affect the other gamblers. Contrary to the situation when we take into consideration only one player –he goes to casino 100 times and he goes bust. Then he is not able to play any longer. This is an example of time probability which can be also called probability of ruin. By bringing those examples, the author shows that the probability than can be applied to the group of people cannot be applied to one single person. The same can be assessed when taking into consideration investors. The risk or probability that is exposed by investment advisors and financial professors to the group of investors cannot be applied to the individual investor. Those financial gurus are explaining the probability and risk based on long term approach of returns of the market. Moreover, the Taleb’s opinion is that any person is able to generate the returns that the advisors are telling, due to the fact that any person has unlimited and infinite amount of money.
Image of page 1

Subscribe to view the full document.

Image of page 2
  • Spring '19

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Ask Expert Tutors You can ask You can ask ( soon) You can ask (will expire )
Answers in as fast as 15 minutes