Re: Two draft papers: AI and existential risk; heuristics and biases

From: Robin Lee Powell (
Date: Sun Jun 04 2006 - 22:48:51 MDT

On Sun, Jun 04, 2006 at 09:33:26AM -0700, Eliezer S. Yudkowsky wrote:
> These are drafts of my chapters for Nick Bostrom's forthcoming edited
> volume _Global Catastrophic Risks_. I may not have much time for
> further editing, but if anyone discovers any gross mistakes, then
> there's still time for me to submit changes.
> The chapters are:
> _Cognitive biases potentially affecting judgment of global risks_

    Taleb (2001) gives the example of a trader whose strategy worked
    consistently for six years, yielding more than $80 million -
    then lost $300 million in a single catastrophe.

    Long-Term Capital Management was a hedge fund whose founders
    included two winners of the Nobel Prize in Economics. During the
    Asian currency crisis and Russian bond default of 1998, the
    markets behaved in a literally unprecedented fashion, assigned a
    negligible probability by LTCM's historical model. As a result,
    LTCM began to lose $100 million per day, day after day. On a
    single day in 1998, LTCM lost more than $500 million. (Taleb

Those numbers (the 1st para vs. the second para) don't seem to fit.
Perhaps the first para needs to read $80/$300 billion?


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