The flaw of averages : why we underestimate risk in the face of uncertainty / Sam L. Savage.

Format:

Book

Author/Creator:

Savage, Sam L.

Language:

English

Subjects (All):

Risk.

Uncertainty.

Physical Description:

1 online resource (418 p.)

Edition:

1st edition

Other Title:

Why we underestimate risk in the face of uncertainty

Place of Publication:

Hoboken, N.J. : John Wiley & Sons, 2012.

Language Note:

English

System Details:

text file

Summary:

A must-read for anyone who makes business decisions that have a major financial impact. As the recent collapse on Wall Street shows, we are often ill-equipped to deal with uncertainty and risk. Yet every day we base our personal and business plans on uncertainties, whether they be next month's sales, next year's costs, or tomorrow's stock price. In The Flaw of Averages , Sam Savageknown for his creative exposition of difficult subjects describes common avoidable mistakes in assessing risk in the face of uncertainty. Along the way, he shows why plans based on average assumptions are wrong, on average, in areas as diverse as healthcare, accounting, the War on Terror, and climate change. In his chapter on Sex and the Central Limit Theorem, he bravely grasps the literary third rail of gender differences. Instead of statistical jargon, Savage presents complex concepts in plain English. In addition, a tightly integrated web site contains numerous animations and simulations to further connect the seat of the reader's intellect to the seat of their pants. The Flaw of Averages typically results when someone plugs a single number into a spreadsheet to represent an uncertain future quantity. Savage finishes the book with a discussion of the emerging field of Probability Management, which cures this problem though a new technology that can pack thousands of numbers into a single spreadsheet cell. Praise for The Flaw of Averages "Statistical uncertainties are pervasive in decisions we make every day in business, government, and our personal lives. Sam Savage's lively and engaging book gives any interested reader the insight and the tools to deal effectively with those uncertainties. I highly recommend The Flaw of Averages ." — William J. Perry , Former U.S. Secretary of Defense "Enterprise analysis under uncertainty has long been an academic ideal. . . . In this profound and entertaining book, Professor Savage shows how to make all this practical, practicable, and comprehensible." — Harry Markowitz , Nobel Laureate in Economics

Contents:

pt. 1. The big picture

pt. 2. Five basic MINDles for uncertainty

pt. 3. Decisions and information

pt. 4. The seven deadly sins of averaging

pt. 5. The flaw of averages in finance

pt. 6. Real finance

pt. 7. The flaw of averages in supply chains

pt. 8. The flaw of averages and some hot button issues

pt. 9. Toward a cure for the flaw of averages.

Notes:

Description based upon print version of record.

Includes bibliographical references and index.

Description based on publisher supplied metadata and other sources.

ISBN:

9786612114663

9786613854926

9781118373583

1118373588

9781282114661

1282114662

9780470488119

0470488115

9780471381976

0471381977

9781283542470

1283542471

9781118373576

111837357X

OCLC:

466876983