they are not making a statement based on empirical evidence, or computation of the odds, but based on what? On some model, some theory.
What's the difference between "based on computation of the odds" and "based on some model"?
What's the difference between "based on computation of the odds" and "based on some model"?
Taleb is doing some handwaving here.
"Some model" in this context is just the assumption of a specific probability distribution. So if, for example, you believe that the observation values are normally distributed with the mean of 0 and the standard deviation of 1, the chance of seeing a value greater than 3 (a "three-sigma value") is 0.13%. The chance of seeing a value greater than 6 (a "six-sigma value") is 9.87e-...
Another month has passed and here is a new rationality quotes thread. The usual rules are: