Mediocristan: The Stability of Averages
In Mediocristan, no single observation significantly impacts the total, and averages become increasingly stable as the population grows. This explains why macroscopic objects like a coffee cup do not exhibit random jumps despite microscopic particle motion.
THE IDEA
How Coffee Drinking Can Be Safe
Recall from the Mediocristan discussion in Chapter 3 that no single observation will impact your total. This property will be more and more significant as your population increases in size. The averages will become more and more stable, to the point where all samples will look alike.
I’ve had plenty of cups of coffee in my life (it’s my principal addiction). I have never seen a cup jump two feet from my desk, nor has coffee spilled spontaneously on this manuscript without intervention (even in Russia). Indeed, it will take more than a mild coffee addiction to witness such an event; it would require more lifetimes than is perhaps conceivable—the odds are so small, one in so many zeroes, that it would be impossible for me to write them down in my free time.
Yet physical reality makes it possible for my coffee cup to jump—very unlikely, but possible. Particles jump around all the time. How come the coffee cup, itself composed of jumping particles, does not? The reason is, simply, that for the cup to jump would require that all of the particles jump in the same direction, and do so in lockstep several times in a row (with a compensating move of the table in the opposite direction). All several trillion particles in my coffee cup are not going to jump in the same direction; this is not going to happen in the lifetime of this universe. So I can safely put the coffee cup on the edge of my writing table and worry about more serious sources of uncertainty.
When to use it
Insurance: checking whether risks are sufficiently independent and bounded for pooling to stabilize aggregate losses.
Opinion polls: using a larger representative sample to reduce sampling variability, while checking selection and measurement bias.
Physics: macroscopic objects behave predictably despite microscopic randomness.
Finance: examining whether diversification reduces exposure to individual assets and how common shocks could still affect the portfolio.
FROM THEORY TO EVERYDAY LIFE
In practice
Coffee Cup Not Jumping
A cup jumping because of coordinated microscopic motion is extraordinarily unlikely. Taleb uses that contrast to illustrate how aggregate behavior can be stable despite variation among individual particles.
A MOMENT TO REFLECT
Put it to work.
Why does microscopic randomness not normally produce a visible jump of the whole cup? How is that different from ordinary risks of placing it near an edge?
How does the stability of averages in large populations affect our daily decisions?
What are the implications of this property for risk assessment in insurance or finance?
Often confused with
CONTINUE THE CONVERSATION
Source texts
- The Black Swan The Impact of the Highly Improbable With a new section On Robustness and Fragility (Nassim Nicholas Taleb)