FORA.tv - Nassim Taleb & Daniel Kahneman: Reflect on Crisis

FORA.tv - Nassim Taleb & Daniel Kahneman: Reflect on Crisis

Note from Jim: If you're an insurance leader, you should find this 59 minute video rather insightful. You might want to prepare yourself for answering far reaching questions from your stakeholders as prompted by the ideas conveyed here.

Two prominent academics discuss the causes for the financial crises and ways of averting future recurrence. These discussions prompt subsequent questions about regulation including regulation of the insurance industry. Topics discussed include:

- The role of rare events.
- The difficulty of modeling rare events. "Rare events are not computable".
- Financial models abet irrational and foolish risk taking.
- Why people (and companies) should not be willing to take "massive risk" around rare events.
- Human irrationality about the improbability of massive risk.
- The blind folds worn by human minds. (Heuristics)
- How and why people are fooled by risk.
- The systemic absence of alignment between the long-term interests of public corporations and the short-terms interests of their "massive risk taking"" decision makers.
- "Domain Conflict" and "Moral Hazards" related to risk taking.


"Author Nassim Taleb and Nobel Laureate Daniel Kahneman discuss the intricacies of the financial crisis and its far-reaching influence. Looking forward, they offer proposals to remedy the situation and prevent it from ever recurring."

Bio On Kahneman: http://en.wikipedia.org/wiki/Daniel_Kahneman

Bio on Taleb: http://en.wikipedia.org/wiki/Nassim_Taleb

Find video here: http://fora.tv/2009/01/27/Nassim_Taleb_and_Daniel_Kahneman_Reflection_on_a_Crisis#chapter_05

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This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.