Not exact matches
He believed in the potential long -
tail profit, that selling the first - window rights would begin to mitigate the production
risk that Dynamics would take — indeed, the
biggest it had ever taken.
The
biggest criticism for the endowments is that they did not manage their
risk, liquidity, and «
tail -
risk» enough.
This not only exacerbates the first point above, but it results in an incentive structure which is asymmetric (heads, I win
big...
tails, I don't lose) leading to excessive
risk - taking.
The long
tail isn't very
big, but the consequences of such high values are so extreme that they may dominate
risk analysis.