Take the classic investment advice “a mixture of stocks AND bonds”. For the purpose of this post assume the classic advice is correct.
What that advice is saying “stocks is the best option normally but bonds act as a hedge”.
Meaning for the conditional probability where stocks are going down, bonds tend to hold more of their value.
So this isn’t softmax. Softmax would say “invest in the best past performing stock fund and also spread money around to the other stocks”. (Argmax would be “all in on Berkshire Hathaway” or whatever)
“Conditional probability hedging” is something else. It’s taking the most probable bad outcome from your top choice and reevaluating your actions, assuming the most probable bad choice is true.
For example a robot picking something up might consider the most probable bad outcome to be the item was dropped, and it might choose to take some action to mitigate if that happens. (If it has 2 arms it could put the second one in the path of the most probable way the item could fall)
I am not quite sure this is correct.
Take the classic investment advice “a mixture of stocks AND bonds”. For the purpose of this post assume the classic advice is correct.
What that advice is saying “stocks is the best option normally but bonds act as a hedge”.
Meaning for the conditional probability where stocks are going down, bonds tend to hold more of their value.
So this isn’t softmax. Softmax would say “invest in the best past performing stock fund and also spread money around to the other stocks”. (Argmax would be “all in on Berkshire Hathaway” or whatever)
“Conditional probability hedging” is something else. It’s taking the most probable bad outcome from your top choice and reevaluating your actions, assuming the most probable bad choice is true.
For example a robot picking something up might consider the most probable bad outcome to be the item was dropped, and it might choose to take some action to mitigate if that happens. (If it has 2 arms it could put the second one in the path of the most probable way the item could fall)