Gerd Gigerenzer on better models for dealing with uncertainty
“Haldane* and I have shown that under uncertainty, simple, robust models can make better predictions than complex and mostly incomprehensible models. Under uncertainty, models that are optimized based on past data are the wrong approach – since the future is not like the past. We need simple, robust models.”
– Risk researcher Gerd Gigerenzer on lessons from the Corona shock, false assumptions in the financial world and simple rules for investment, in “Models create illusion of certainty”, Handelsblatt from May 18, 2020, page 26, No. 95
* Andy Haldane, Chief Economist of the Bank of England