The Problem is Beyond Psychology: The Real World is More Random than Regression Analyses

Taleb, Nassim  Nicholas; Goldstein, Daniel G.

Abstract

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The Problem is Beyond Psychology: The Real World is More Random than Regression Analyses

Microsoft Research New York City; London Business School

October 10, 2011

International Journal of Forecasting, Forthcoming

Abstract:
Where the problem is not expert underestimation of randomness, but more: the tools themselves used in regression analyses and similar methods underestimate fat tails, hence the randomness in the data. We should avoid imparting psychological explanations to errors in the use of statistical methods.

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Date posted: October 10, 2011

Suggested Citation

Taleb, Nassim Nicholas and Goldstein, Daniel G., The Problem is Beyond Psychology: The Real World is More Random than Regression Analyses (October 10, 2011). International Journal of Forecasting, Forthcoming. Available at SSRN: http://ssrn.com/abstract=1941792

Contact Information

Nassim Nicholas Taleb (Contact Author) NYU-Poly ( email ) Brooklyn, NY 11201 United States
Daniel G. Goldstein Microsoft Research New York City ( email ) New York, NY United States
London Business School ( email ) Sussex Place Regent's Park London, London NW1 4SA United Kingdom +44 0 20 7000 8611 (Phone) +44 0 20 7000 8601 (Fax) HOME PAGE: http://www.dangoldstein.com

Abstract

The Problem is Beyond Psychology: The Real World is More Random than Regression Analyses

Nassim Nicholas Taleb

Daniel G. Goldstein

Date posted: October 10, 2011

Suggested Citation

Contact Information

Nassim Nicholas Taleb (Contact Author)

Daniel G. Goldstein