The typical argument I’ve read is that we should take more risk, because risk taking widens the distribution and gives us more probability of ending up in the tail.
However, blind risk taking widens the distribution symmetrically. So we need to find ways to increase the positive tail probability, while taking more risk. You propose ‘weak ties’ and ‘virtue’ as a solution.
I’m going to take the leap and assume you mean virtue signaling, or any other form of signaling that makes you look like a good ally. With such signaling, others will be more likely to become your ally and help you out when you undertake your risky venture. This would increase your probability of success. Doing the opposite would reduce your probability (decay your upside).
Great comment; you’re right that in addition to avoiding upside decay, we can also try to increase the positive tail!
Also good spot that virtue as defined here is relative (e.g. during the Cold War the USA would be considered “virtuous” by dint of being less mean than the USSR).
This closely relates to the concept of black swan farming.
The typical argument I’ve read is that we should take more risk, because risk taking widens the distribution and gives us more probability of ending up in the tail.
However, blind risk taking widens the distribution symmetrically. So we need to find ways to increase the positive tail probability, while taking more risk. You propose ‘weak ties’ and ‘virtue’ as a solution.
I’m going to take the leap and assume you mean virtue signaling, or any other form of signaling that makes you look like a good ally. With such signaling, others will be more likely to become your ally and help you out when you undertake your risky venture. This would increase your probability of success. Doing the opposite would reduce your probability (decay your upside).
Great comment; you’re right that in addition to avoiding upside decay, we can also try to increase the positive tail!
Also good spot that virtue as defined here is relative (e.g. during the Cold War the USA would be considered “virtuous” by dint of being less mean than the USSR).