> How my own driving skill differs from the average person feels to me a straightforward known unknown.
I didn’t think of model where this mattered. I was more thinking of a model like “number of mistakes goes up linearly with alcohol consumption” than “number of mistakes gets multiplied by alcohol consumption”. If the latter than this becomes an opaque risk (that can be measured by measuring your number of mistakes in a given time period).
> For a business that sells crops it’s reasonable to buy options to protect against risk that come from the uncertainty about future prices.
Agreed. It also seems reasonable when selecting what commodity to sell to do a straight up expected value calculation based on historical data, and choose the one that has the the highest expected value. When thinking about it, perhaps there’s “semi-transparent risks” that are not that dynamic or adversarial but do have black swans, and that should be it’s own category above transparent risks, under which commodities and utilities would go. However, I think the better way to handle this is to treat the chance of black swan as model uncertainty that has knightian risk, and otherwise treat the investment as transparent based on historical data.
> How my own driving skill differs from the average person feels to me a straightforward known unknown.
I didn’t think of model where this mattered. I was more thinking of a model like “number of mistakes goes up linearly with alcohol consumption” than “number of mistakes gets multiplied by alcohol consumption”. If the latter than this becomes an opaque risk (that can be measured by measuring your number of mistakes in a given time period).
> For a business that sells crops it’s reasonable to buy options to protect against risk that come from the uncertainty about future prices.
Agreed. It also seems reasonable when selecting what commodity to sell to do a straight up expected value calculation based on historical data, and choose the one that has the the highest expected value. When thinking about it, perhaps there’s “semi-transparent risks” that are not that dynamic or adversarial but do have black swans, and that should be it’s own category above transparent risks, under which commodities and utilities would go. However, I think the better way to handle this is to treat the chance of black swan as model uncertainty that has knightian risk, and otherwise treat the investment as transparent based on historical data.
After having someone else on the EA forum also point me to the data on commodities, I’m now updating the post.