"Economists have been reluctant to consider … that probabilistic representations of uncertainty, miss something … essential: the process driving outcomes undergoes change cannot be characterized with a stochastic process.” https://www.ineteconomics.org/research/programs/knightian-uncertainty-economics-kue … 1/2
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There are actually no frequentist probabilities associated with most financial events for the most part. They are mostly an illusion. There are pseudo probabilities for which probability theory helps, but that’s a technical thing 2/2
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Replying to @EmanuelDerman
This is a profound and central point -- one seldom made explicit, and even less often properly appreciated. L J Savage was perhaps the first to consider its implications; but he made little headway, and it may be beyond the power of mathematical science to go much further.
12:30 PM - 15 Mar 2019
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