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The Flaw of Averages (2020)


Why averages are misleading, and what you can do about it.

"Don't cross a river if it is four feet deep on average" — Nassim Nicholas TalebNassim Taleb likes to say this, and I'm sure we'd all agree with him. Yet in most of our decisions, we wade into precisely these rivers by making estimates based on averages: we don't account for uncertainty. Being too optimistic has obvious costs, but being too pessimistic means you'll end up making unnecessary sacrifices to try to mitigate risks that don't actually exist.

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Flaw of Averages