In this episode, we delve deeper into the frequentist definition of probability, showing how probabilities emerge from limiting relative frequencies. We discuss why this approach can be useful for mass random phenomena but falls short for single or rare events—especially in risk management contexts involving heavy-tailed risks. Through examples, we highlight the dangers of relying solely on historical data and underscore the need for more robust tools to capture the true nature of randomness.

Become a supporter of this podcast: https://www.spreaker.com/podcast/the-logic-of-risk--6469023/support.