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Certainty, Strategy, Statistics and Risk

July 16, 2011

Uncertainty is a fact of life:  it is fundamental to the universe at the level of quantum mechanics.  Thus we must deal with uncertainty.  Two schools of thought are what I mean by Statistics and Strategy: Strategy tries to use back-up certainties to cover the possibilities of a finitary uncertainty (this is contingency planning) whereas Statistics tries to massage the uncertainties into such a way as we can tolerate them.  When lives are at stake, it pays to rely on strategy only and, as the importance diminishes, so statistics becomes the preferable approach, since statistics better deals with unmanageable complexities (strategy is brittle compared to statistics in this regard.)  The notion of Risk should be founded on an understanding of these three concepts: certainty, strategy and statistics.


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