Uncertainty as Missing Business Logic

This article takes a new perspective in identifying uncertainty, but arrives at the same ol’ conclusion: It does not preclude modelling and simply entails a reduction in confidence of model outcomes. Suppose we have an aggregate model with panel data. Some change over time will already be incorporated, and the substance of such change is … Read more Uncertainty as Missing Business Logic

Applied Unknowns Analysis

One of the major Austrian critiques of certain kinds of analysis focuses on uncertainty. You can make a forecast based on certain data, but something unexpected might come along and muck everything up. In the past I have described ways of overcoming this issue. These article contains 3 sections which do the following: Argues for … Read more Applied Unknowns Analysis

Skills in Overcoming Uncertainty

This article outlines some skills in overcoming uncertainty. It’s heavily biased toward software engineering. I also talk about environmental variables which help overcome uncertainty and risk in software development. Tldr: Skills include the ability to research, the ability to trial and error, and the practice of regularly learning, each of which have generic and project-specific … Read more Skills in Overcoming Uncertainty

Further Contra Uncertainty

This article further criticizes the notion of Knightian uncertainty which is often used to attack equilibrium theory. Section II highlights some past work. I recently watched and old debate between Caplan and Boettke. The debate focuses on the validity of Austrian economics, but my focus is on Bryan’s criticism of uncertainty. See 5:41 of this … Read more Further Contra Uncertainty

Categorical Certainty: Contra Radical Uncertainty

This article defends economic forecasting against the critique of radical uncertainty, which is also called Knightian uncertainty. I grant such uncertainty exists but I argue it simply requires minor compensation from standard analytical methods. Here are some criticisms against standard equilibrium analysis: Radical uncertainty Radical subjectivism Irrationality Here are my defenses: Categorical Certainty + Confidence … Read more Categorical Certainty: Contra Radical Uncertainty

Rational Estimation and Price Under Uncertainty

This article talks about ways to deal with uncertainty, and I will also briefly define the concept in contrast with simple risk. Definitions: Uncertainty vs Risk Rational Estimation without Uncertainty Rational Estimation with Uncertainty 1 – Definitions: Uncertainty vs Risk Uncertainty and risk are both not simple economic phenomena. They are generic elements of complex … Read more Rational Estimation and Price Under Uncertainty

The Risk Paradox

In economics, the theory goes, actors can be risk loving, risk neutral, or risk averse. Most people, the theory continues, are risk averse. Insurance institutions are risk neutral and rarely you will encounter perhaps a gambling addict or some such individual who is actually risk loving. Risk loving actors introduce a paradox which is not … Read more The Risk Paradox