The World's Best Book Summaries
Does the bell curve accurately describe the world? When does the bell curve work, and when does it fail? How can we make better predictions and more accurately describe the phenomena of real life? We’ll cover the situations in which the normal bell curve distribution is a good predictor of the real world, the situations where it’s not, and better ways to represent randomness in an uncertain world.
What is scalability? How does scalability affect our lives? When is scalability a good thing? When is it a negative thing? Scalability is the characteristic or ability of a company or process to grow and adapt to changing demands. In the scalable parts of our lives, physical limits don’t apply and effects tend toward incredible extremes. We’ll further explore the scalability definition above, cover how scalability affects our lives, and cover which areas of our lives are most impacted by scalability.
What is a power-law distribution? How is it useful in describing and predicting events in the real world, which is full of uncertainty? Power-law distribution is a functional relationship between two quantities in which the relationship remains constant no matter the initial size of the quantities. This relationship is useful in describing events and phenomena that can’t be graphed on a bell curve. We’ll cover the basics of power-law distribution and look at how it works to accurately describe the world and account for otherwise unpredictable events.
What is a fractal? How are fractals useful in representing and predicting relatively unpredictable events? A fractal is a geometric pattern that repeats at different scales. Fractals, unlike pure geometric shapes like triangles or circles, are seen quite frequently in nature. We’ll cover what a fractal is and how it can help us make predictions in a world full of uncertainty.
What’s a grey swan? How does it serve as a metaphor for events that aren’t predictable, exactly, but imaginable? A grey swan (alternately, gray swan) is a term for events that can’t be predicted but can be imagined. It can also refer to an event that’s unlikely but possible. The term was popularized by Nassim Nicholas Taleb in the book Black Swan. We’ll cover what a grey swan is, how it fits in with black and white swans, and how to turn black swans grey.
What is the butterfly effect theory? How is it related to the idea of nonlinearities? How does it explain why we make bad predictions? The butterfly effect theory is the idea that a small change in a nonlinear system can have huge effects in the larger system. This idea was proposed by an MIT meteorologist, who discovered that an infinitesimal change in input parameters can drastically change weather models. We’ll cover what the butterfly effect theory is and how small changes can have large effects.
What does it mean for something to be “non-scalable”? What does it mean for something to be “scalable”? Can a job be scalable or non-scalable? We’ll cover examples of jobs that are non-scalable and jobs that are scalable to give you a better idea of the benefits of a scalable job.
What is Extremistan? Where is it? Where does the word come from? What elements of our lives fall under the purview of Extremistan? Extremistan is a term coined by Nassim Nicholas Taleb to explain the randomness and deviations from the mean of most social, man-made aspects of human society. The term was popularized by Taleb’s book The Black Swan. We’ll cover what Extremistan is, how it differs from Mediocristan, what kinds of events and characteristics come from the land of Extremistan, and why Extremistan often makes prediction impossible.
What is the law of small numbers? How does ignoring it lead to biased decision-making? The law of small numbers is the bias of making generalizations from a small sample size. In truth, the smaller your sample size, the more likely you are to have extreme results. If you’re not aware of this principle, when you have small sample sizes, you may be misled by outliers. We’ll cover two examples of the law of small numbers in action and how to use your awareness of it to make better decisions.
What is Amos Tversky and Daniel Kahneman’s prospect theory? How does it explain human behavior? Prospect theory is a theory in economics developed by Amos Tversky and Daniel Kahneman. It says that Utility depends on changes from one’s reference point rather than absolute outcomes. The theory suggests that people don’t always behave rationally. We’ll cover what Kahneman’s prospect theory is, how it works, and how it challenges traditional utility theory.