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Yeah I think simulations are massively underused. They might not help you prepare for a black swan type event, but a lot of times we're not ready for very norm

Yeah I think simulations are massively underused. They might not help you prepare for a black swan type event, but a lot of times we're not ready for very normal problems. I suspect a day or two per year spent doing basic modeling and simulation would benefit a lot of teams, even back of the envelop stuff. Then you can return to the exercise a year later and see if your assumptions were on point or what turned out to be much different than expected and refine the model and parameters of the simulation.

college_physics 4y ago
> They might not help you prepare for a black swan type event at some point probabilistic simulations were all the rage in the financial industry and then the financial crisis happened it is a fine art to figure out how to elicit the benefits of Monte Carlo simulation to put some structure around the future without falling into a mental trap that blinds you to non-quantifiable scenarios
travisjungroth 4y ago
They're actually great for preparing black swan events. Taleb talks about them in "The Black Swan". Usually the rules of the game aren't as clearly stated as in this problem. Sometimes there is a literal coupon contest, or a node randomly pairs with another node. But usually you're looking at history to try to to understand the odds and then forecast some futures. The problem with doing that with statistics is it's not very receptive to "fiddling", even if it's Bayesian. With a simulation it's generally easier to throw something weird in there, like an effect orders of magnitude larger, dynamic effects, or a totally new rule.