Friday, December 8, 2017

the circularity of FOMO



I learn that "FOMO" means "fear of missing out." (For many this is the cause of the bitcoin frenzy).

How do you explain FOMO?

According to Marco Novarese & Mario Cedrini's paper The Challenge of Fear to Economics:
... fear (in economics) may be defined as a feeling of anxiety for a specific negative or dangerous possible event, but it may be also related to a sense of discomfort produced by something we do not know, something we do not understand, something we are unable to categorize. To some extent, this dichotomy resembles the distinction between risk and uncertainty...
lack of knowledge, umm.

Here is the problem: If classical probability was intended to manage the fear of a seemingly uncertain world, the concept of risk has only grown as reaction to scarcity of knowledge in the globally- warmed world of the Anthropocene. In the meantime, risk has given economy the possibility to build elegant formal models, with its utility maximizer-agent in standard economic theory turning risk -again- into an illusion of predictability.

So why FOMO?

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* See The Challenge of Fear to Economics.

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