Our new paper on aggregate perceptions of hurricane risks has been published on the Annals of American Association of Geographers.
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In his book Skin in the Game and his previous paper, Nassim Taleb has specifically and extensively criticized Steven Pinker's approach to measuring wars and his conclusion that we are living in the most peaceful era in human history. This naive optimism, Taleb argues, is also shared by those who used to assume the stock market would go up forever without any crashes. Extreme events such as large-scale wars need special statistical approach to measure, such as extreme value theory.
Now, a new paper "show that the overall pattern is not a decline in war, but substantial variation between periods and places. War has not declined and current trends are slightly in the opposite direction." Despite his blunt but abrasive style, Nassim Taleb is a master of conveying complicated ideas and revealing hidden patterns that would otherwise easily escape many people’s eyes. Using observations, historic stories and anecdotes with satire and ridicule, he aptly describe statistics and risks in a way that is not elusive and confusing to laymen. A voracious reader, he is able to integrate great ideas from philosophy, statistics, religion, economics, psychology, political science, medicine into his telling of Incerto. His first two books Fooled by Randomness and Black Swan surround around the theme of fat tail risks that most people are likely to ignore during “normal” times and therefore tremendously underestimate these risk. These risks nevertheless have enormous impacts on societies. If these two books are meant to identify the problem, his latest two books Antifragile and Skin in the Game are concerned with strategies to mitigate the problem. The metaphor “skin in the game” is used to describe any disincentive that exist in a system to prevent individuals from adopting certain reckless measures that would incur damages. It seems to be the optimal way he offers to cope with any systematic risks.
In modernity, many enormous risks go unnoticed for many years because these risks are created, managed, and in some cases intentionally veiled by an ever growing class that has no skin in the game nevertheless makes crucial decisions for others. According Taleb, bureaucrats, policy wonks, politicians, bankers, corporate executives, journalists, and academics all belong to this class. That many hidden fat tail risks end up blowing up to the faces of these so-called elites is precisely due to their safe insulation from these risks. One can only learn from bearing the direct consequences of one's own mistakes. No personal consequences, no sincerity; no skin in the game, no effective risk management. In order to mitigate these risks, disincentives thus need to be put in place in the system. Everyone needs to put their skin in the game. This prescription seems to resonate with the prospect theory that one is more averse the risk than embracing the reward of equal amount. This asymmetry is reminiscent of evolution.To put it plainly, we can only be so happy but the other side is the end of our existence. Evolution is an emotionless, cruel (from an individual life's perspective), but super effective machinery. Systems improve by eliminating the weak. He further suggests that the only way for society to function well has got to be from bottom up, not top down. That's why globalization, interventionism, hierarchical bureaucracy have not and will not work. He also explains Elinor Ostrom's pioneering work on self-governance to address the "tragedy of the commons" as follows, "the skin-in-the-game definition of a commons: a space in which you are treated by others the way you treat them, where everyone exercises the Silver Rule." If such a commons gets established by explicit or implicit rules, the resources can be managed well to avoid a tragedy of the commons caused by individuals' pursuit of self interests while ignoring others' welfare. It seems that Taleb interprets Ostrom’s work as evidence for decentralization of governance. But Ostrom’s theory is characterized as “polycentricity.” The optimal scale of governance should correspond to the problem of the same scale. For instance, the global scale of climate change essentially requires international cooperation. In this book, he debunks the myths of “majority rule,” “Pascal Wager,” among others. He ridicules the “Intellectual Yet Idiots.” He instructs that we should choose surgeons that do not look like surgeons. He distills the wisdom of time into the expert called Lindy. The reason why it is the stubborn minority that dominates is because this smaller group has more at stake, in other words, skin in the game. He uses the example that how one family member with peanut allergy can spread the “no peanut” rule first to the household and later to whichever social circle this member happens to be at. The reason why “Pascal Wager” is not true is because it cost a lot for someone to believe in God. Faith is not cheap talk. Religious people have put their necks on the line to be truly faithful unless they are hypocrites. Some quotes from the book: "You will never fully convince someone that he is wrong; only reality can." "There is no evolution without skin in the game." "The curse of modernity is that we are increasingly populated by a class of people who are better at explaining than understanding." "What is rational is what allows the collective - entities meant to live for a long time - to survive." "Things designed by people without skin in the game tend to grow in complication (before their final collapse)." "The main idea behind complex systems is that the ensemble behaves in ways not predicted by its components. The interactions matter more than the nature of the units." Risk perceptions have been intensively studied because they are believed to induce behavior change, which would have consequences in the world. Now, a group of researchers from multiple disciplines have taken this idea one step further by linking human behavior model with climate model. Their study has just been published on Nature Climate Change. It is exciting to see this kind of integrative approach in the climate research field. The complexity of climate change really requires concerted efforts of scientists from a wide range of disciplines.
Extremely cold temperature can be utilized by politicians as counter evidence to climate change. Scientists, trained to be cautious, need to conduct rigorous studies to either confirm or fail to confirm any hypotheses. A new study shows that the deep freeze in the U.S. is not related to climate change.
Leonardo Da Vinci by Walter Issacson Da Vinci is the ultimate learning machine in human history. In his eyes, the world is full of secrets that await to be revealed and riddles that need to be solved. Driven by passionate curiosity and armed with acute observation, he beautifully integrates arts and sciences in his paintings and designs. His seven-thousand-page notebook is equivalent to a museum, full of his thoughts, imagination, fantasies, and creation. Anyone with intellectual curiosity should read how this multi-disciplinary master lived a full life of mind.
Zero to One by Peter Thiel Thiel writes in the Preface, "The next Bill Gates will not build an operating system. The next Larry Page or Sergey Brin won't make a search engine. And the next Mark Zuckerberg won't create a social network. If you are copying these guys, your aren't learning from them." Many view this book as a business book, serving as a guide for aspirational entrepreneurs. I see this book as an educational one. In an age when competition is dearly valued in the education system, when young children are constantly evaluated by numeric metrics, not many participants bother to step back and weigh the pros and cons of competition. To stand out from a large crowd, we naturally assume, must be through cruel and fierce competition. Stories of the most successful people in many fields suggest that the path from 0 to 1 is much easier than that from 1 to n. When Artificial Intelligence is forcefully driving the world by surpassing humans in repetitive and computation-intensive tasks, creativity and innovation cannot be more essential to our survival. The AI Revolution: The Road to Superintelligence by Tim Urban While many are aware of global climate change and nuclear war being potential existential risks to the humanity, serious concerns for Artificial Intelligence are only shared within a small circle of intellectual elites including Stephen Hawking, Elon Musk, Bill Gates, Nick Bostrom among others. The three stages of AI development include Artificial Narrow Intelligence (ANI), Artificial General Intelligence (AGI), and Artificial Super Intelligence (ASI). We are currently at the first stage ANI. ANI has quietly and forcefully become part of modern life for many citizens in the developed world. Every time when you watch a movie, Netflix would recommend something with the saying "you may also like this..." Every time when you order a book on Amazon, you will see "Customers who bought this also bought..." All these are done by algorithms, ANI. ANI has become so good at what it is specifically programmed to do that it can beat the human world chess and go champions. Given the exponential growth rate of technology, it may well be a couple of decades before we reach AGI. AGI displays general intelligence equivalent to human intelligence. Many may celebrate that prospect and think we will achieve some sort of utopia. After all, what could go wrong if we let AI do all the work and we enjoy lives? Just like the natural evolution did not stop when some animals climbed out of the ocean and started to occupy the land, AI will more than likely continue to improve once it arrives at AGI. Unlike the slow and gradual pace of natural evolution, the growth in AI will be exponential. Before we know it, AGI will become ASI. By then, we will be confronted with the new reality that for the first time our intelligence will be exceeded by AI, paradoxically created by us. The thought of this prospect itself can generate fears. The good news is that many highly intelligent people are thinking about AI safety. Let's hope AI will only be our complements, never substitutes. Holidays can be good times to catch up on reading. Here is what I have been reading during this holiday:
Influence by Robert Cialdini. In this book, social psychologist Robert Cialdini distills decades of research on persuasion and influence into six universal principles including: reciprocation, commitment and consistency, social proof, liking, authority, and scarcity. For anyone with ambitions to have positive influence on others or cautions to avoid falling prey to any ill-intentioned advances, this is a must-read. Tribe of Mentors by Tim Ferris. The four-hour week guru assembled a league of high achievers from a wide variety of fields and asked them the same set of questions. One take-away from these answers is: there is no common path to success. For anyone who wants to copy others, imitation may not be the most effective way to stand out in a large crowd. My favorite part of this book is that many guests recommend books that they give away most. The Elon Musk Post Series on waitbutwhy by Tim Urban. Many so-called experts like to pretend to know more than they actually do by complicating things to cover up their ignorance. True masters actually drill complicated stuff down into simple terms that can be easily understood by laymen. Tim Urban obviously belongs to the latter. He uses childish drawings and no-nonsense words to explain truly complex and complicated phenomena. This Elon Musk post series is especially interesting. For anyone who wants to grasp the thinking of the visionary of our time, this is a good start. It has long been speculated that the regional climate plays a role in shaping personalities. Recently, a group of researchers mainly from China and the U.S. have used large-scale data, multilevel analyses and machine learning analyses to test this hypothesis. Nature Human Behavior just published their study linking regional temperature with human personality. The authors have made some interesting but intuitive findings. Personalities related to socialization and stability such as agreeableness, conscientiousness, and emotional stability, and personal growth and plasticity such as extraversion and openness to experience are often associated with more clement temperature along with which individuals grew up. They further suggested that climate change may bring concomitant changes in human personality.
Once again, this finding resonates with the notion that we are products of our surrounding environment. I presented our study on community resilience and county-level perceptions of hurricane risks along the US Gulf Coast at the 2017 Society for Risk Analysis annual conference in Arlington, VA.   In a study that has been accepted by the Annals of the American Association of Geographers, my coauthors and I have examined how community resilience along with objective hurricane risks impacts aggregate perceptions of hurricane risks. We first applied spatial techniques to transform individual-level perceptions to the aggregate level, in this case, counties. The map below displays the geographic pattern of hurricane risk perceptions among coastal counties along the U.S. Gulf Coast. Clearly, there is a concentration of heightened hurricane risk perceptions stretching from southeast Texas to west Florida. Given the recent enormous impact of Hurricane Harvey in southeast Texas and West Louisiana, it is likely that risk perception has further increased among coastal residents who have been affected by Harvey. Further, we found two aspects of community resilience measured by Cutter et al. (2014), namely economic resilience and community capital, are positively related to aggregate perceptions of hurricanes risks. This indicates that communities with more economic resources and social capital tend to perceive greater threat of hurricanes. The policy implication is that counties with less economic and social capitals need to direct efforts on educating the public about scientific assessments of hurricanes risks.  County Level Risk Perception Scores (Source: Shao, Gardezi, and Xian, forthcoming) Reference:
Cutter, S. L., Ash, K. D. and Emrich, C. T. 2014. The geographies of community disaster resilience. Global Environmental Change, 29, 65-77. Shao, W, Gardezi, M., and Xian, S. (forthcoming). Examining the effects of objective hurricane risks and community resilience on risk perceptions of hurricanes at the county level in the U.S. Gulf Coast: An innovative approach" Annals of the American Association of Geographers. |
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