R3AL Talk

“It is intuitive to think public is better than private, but next time someone tells you that, tell them to think about this: public toilets.” -John Stossel, No They Can’t 

Path dependence is the heuristic that explains how the set of decisions one faces for any given circumstance is limited by the decisions one has made in the past, even though past circumstances may no longer be relevant. This concept was thoroughly explored in New York Times best selling author Nassim Taleb’s Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets. His thesis argues that most people operate within the confines of heuristic laws unknowingly and are worse off for it. While he presents his argument in terms of his experience as a trader on Wall Street, I found his description of human nature to be equally true in terms of…

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