Antifragile Things That Gain From Disorder

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  • Antifragile: Things That Gain From Disorder. Nassim Nicholas Taleb. Random House / Penguin, 2012

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From the Wikipedia:

"In the introduction of the book, Taleb describes it as follows: "Some things benefit from shocks; they thrive and grow when exposed to volatility, randomness, disorder, and stressors and love adventure, risk, and uncertainty. Yet, in spite of the ubiquity of the phenomenon, there is no word for the exact opposite of fragile. Let us call it antifragile. Antifragility is beyond resilience or robustness. The resilient resists shocks and stays the same; the antifragile gets better."

"Simply, antifragility is defined as a convex response to a stressor or source of harm (for some range of variation), leading to a positive sensitivity to increase in volatility (or variability, stress, dispersion of outcomes, or uncertainty, what is grouped under the designation "disorder cluster"). Likewise fragility is defined as a concave sensitivity to stressors, leading a negative sensitivity to increase in volatility. The relation between fragility, convexity, and sensitivity to disorder is mathematical, obtained by theorem, not derived from empirical data mining or some historical narrative. It is a priori."

In the last chapter (p. 412), among the people Taleb criticizes is Alan Blinder, the former vice chairman of the board of governors of the Federal Reserve System for trying to sell him an investment product at Davos in 2008 which would allow an investor to circumvent the regulations limiting deposit insurance and benefit from coverage for near unlimited amounts. Taleb commented that the scheme "would allow the super-rich to scam taxpayers by getting free government-sponsored insurance." He also criticized Alan Blinder for using ex-regulators to game the system which they built in the first place and for voicing his opposition to policies of bank insurance that would hurt his business, i.e., claiming that what is good for his business is "for the public good". The event has been discussed in the media,[3][4] but not denied by Blinder." (http://en.wikipedia.org/wiki/Antifragile:_Things_That_Gain_from_Disorder)