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There is a wonderful corollary in basic statistics modeling that success tends to be a long-tailed distribution. Reason: the easiest framework that allows mode
by crdrost 7y ago
There is a wonderful corollary in basic statistics modeling that success tends to be a long-tailed distribution.
Reason: the easiest framework that allows modeling "the resulting random variable R is zero if any of the incoming variables vₙ is zero" is the product formulation,
R = Πₙ vₙ
which by taking the logarithm of the individual variables becomes a standard central-limit-theorem prediction; as a result success in such contexts follows a log-normal distribution[1], which is long-tailed, even if the individual factors fₙ = log vₙ do not look very normal.
This then leads to a growth pattern called Gibrat’s Law[2].
[1]: https://en.wikipedia.org/wiki/Log-normal_distribution https://en.wikipedia.org/wiki/Log-normal_distribution
[2]: https://en.wikipedia.org/wiki/Gibrat%27s_law https://en.wikipedia.org/wiki/Gibrat%27s_law