Goldman Sachs model to predict World Cup game results didn’t come close
The &quot;Ludic Fallacy&quot; strikes again [0].<p>&gt; The ludic fallacy, identified by Nassim Nicholas Taleb in his 2007 book The Black Swan, is &quot;the misuse of games to model real-life situations.&quot;<p>...<p>&gt; The alleged fallacy is a central argument in the book and a rebuttal of the predictive mathematical models used to predict the future – as well as an attack on the idea of applying naïve and simplified statistical models in complex domains. According to Taleb, statistics is applicable only in some domains, for instance casinos in which the odds are visible and defined.<p>Both Taleb&#x27;s books, &quot;The Black Swan&quot; and &quot;Fooled by Randomness&quot; are an interesting take for such models. Meanwhile, most economists know about &quot;Knightian Uncertainty&quot; [1] which talks about differentiation of risk and uncertainty.<p>&gt; &quot;Uncertainty must be taken in a sense radically distinct from the familiar notion of Risk, from which it has never been properly separated.... The essential fact is that &#x27;risk&#x27; means in some cases a quantity susceptible of measurement, while at other times it is something distinctly not of this character; and there are far-reaching and crucial differences in the bearings of the phenomena depending on which of the two is really present and operating.... It will appear that a measurable uncertainty, or &#x27;risk&#x27; proper, as we shall use the term, is so far different from an unmeasurable one that it is not in effect an uncertainty at all.&quot;<p>[0] <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Ludic_fallacy" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Ludic_fallacy</a><p>[1] <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Knightian_uncertainty" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Knightian_uncertainty</a>