Top Highlights

• I prefer true but imperfect knowledge, even if it leaves much indetermined and unpredictable, to a pretence of exact knowledge that is likely to be false. —FRIEDRICH VON HAYEK, Nobel Prize lecture, 1974
• All we can know is that we know nothing. And that is the sum total of human wisdom. —LEO TOLSTOY, War and Peace, 18671
• The precision of the numbers presented to Viniar and Obama was spurious. Obama understood that he had to arrive at a decision on the basis of limited information, and made what, with hindsight, proved a good call. He did so not by probabilistic reasoning but by asking ‘What is going on here?’
• Uncertainty is the result of our incomplete knowledge of the world, or about the connection between our present actions and their future outcomes.
• We have chosen to replace the distinction between risk and uncertainty deployed by Knight and Keynes with a distinction between resolvable and radical uncertainty. Resolvable uncertainty is uncertainty which can be removed by looking something up (I am uncertain which city is the capital of Pennsylvania) or which can be represented by a known proba...