COVID-19: A Knightian Uncertainty

Frank Knight, an economist, formalised a distinction between risk and uncertainty in his 1921 book, Risk, Uncertainty, and Profit. In his classic book, Knight introduced a distinction between measurable uncertainty, which he called “risk,” and “true uncertainty,” which cannot “by any method be reduced to an objective, quantitatively determined probability.”

Why do we make bad decisions?

Like everyone else, we’re subject to cognitive bias, a limitation in our thinking brought about by errors of memory, miscalculation or social attribution. Not all biases are negative, however. The placebo effect, for example, is important in the search for new medicines. This cognitive bias can be so powerful that by simply telling a patient a new drug will make them better, they begin to believe it.

Time will stop for a second

Just as leap years keep our calendars lined up with Earth’s revolution around the sun, leap seconds adjust for Earth’s rotation. This kind of fine-tuning wasn’t much of an issue before the invention of atomic clocks, whose ticks are defined by the cycling of atoms. Cesium-based clocks, one kind of atomic clock, measure the passage of time much more precisely than those based on the rotation of our planet, so adding a leap second allows astronomical time to catch up to atomic time.