Risk vs. Uncertainty in Politics

Nate Silver writes this interesting take on "risk" vs. "uncertainty" in politics.

Well, I don’t know what [Cain] should do. This gets at something of the distinction that the economist Frank H. Knight once made between risk and uncertainty. To boil Mr. Knight’s complicated thesis down into a sentence: risk, essentially, is measurable whereas uncertainty is not measurable.

In Mr. Cain’s case, I think we are dealing with an instance where there is considerable uncertainty. Not only do I not know how I would go about estimating the likelihood that Mr. Cain will win the Republican nomination — I’m not sure that there is a good way to do so at all.

But I do know what an analyst should not do: he should not use terms like “never” and “no chance” when applied to Mr. Cain’s chances of winning the nomination, as many analysts have.

- Posted using BlogPress from my iPhone