Research Seminars

"Beyond Gaussian Averages: redirecting Organization Science Toward Extreme Events and Power Laws"

Speaker: Bill Mc Kelvey
UCLA Anderson School of Management - Los Angeles

10 May 2006 - From 16h00 to 17h00

In power law functions the exponent stays constant whereas in other functions the exponent varies. They seem ubiquitous; we list 80 kinds of them half each among natural and social phenomena (including organizations). Three fundamental consequences are worth noting:
1. Power laws occur because of causes explained by scale-free theories. We now have ~20 of these stemming from various sciences. Each theory identifies a cause that occurs in the same "self-similar" way at multiple levels of a complex system. We argue that all can apply to organizations. Various
consequences obtain.
2. Power laws are indicators of Paretian "extreme" rather than Gaussian "normal" distributions. This means that managers live in world of potential extremes and organizational researchers need to presume that a significant portion of the phenomena they study are outside the statistical world of Gaussian bell curves.
It follows that the current statistical practice of creating what are really artificial normal distributions by the use of various "robustness" techniques--all of which underly quantative-research articles in journals produces misleading, if not wrong and irrelevant research findings. In California, ~16,000 "average" earthquakes occur every year. Studying these "average" quakes is mostly meaningless. Nothing is learned that could prevent damage and death when "the big one" hits. This same idea applies to studying organizations.
3. So, if "normal" statistics frequently could be misleading, how should research practice differ in a world dominated by Pareto distributions? We begin the task of delineating "how to do good science" in a world of actual or potential extreme events where means are meaningless and statistical confidence intervals change each time an extreme event occurs. Several options are discussed.

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Speaker: Emil Verner

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Speaker: Ramona Dagostino

14 March 2019 - T104 - From 2:00 pm to 3:15 pm


title : TBA

Economics & Decision Sciences

Speaker: Harry Di Pei
Northwestern

12 February 2019


title : TBA

Economics & Decision Sciences

Speaker: François Geerolf
UCLA

18 December 2018


title : TBA

Economics & Decision Sciences

Speaker: Marko Tervio
Aalto

13 December 2018


Finance

Speaker: Julien Cujean

6 December 2018 - T104 - From 2:00 pm to 3:15 pm


Finance

Speaker: Andres Liberman

29 November 2018 - T004 - From 2:00 pm to 3:15 pm



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