Assuming wild randomness is intended to reduce the likelihood of its disasters

Evidence

There is an intriguing counterperformative aspect to this use of Levy distributions. They are, as noted in chapter 4, a form of “wild randomness.” Tim Hinkes, their key Chicago proponent, believes however that by assuming wild randomness one reduces the impact, and possibly even the likelihood, of disastrous manifestations of such randomness: “we want to set [a] relatively high bar [margin requirements] and relatively consistent bar for all our firms” (Hinkes interview 1). — Donald MacKenzie, An Engine, Not a Camera, 939

Categorization

• XREF: This is the core counterperformative move of the book’s thesis — the model shapes reality in the opposite direction of its literal content, connecting directly to MacKenzie’s Barnesian/counterperformative framework. — connects to: Risk-control models based on mild randomness can generate the wild randomness they deny — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 1168; Deliberately assuming wild randomness can paradoxically keep markets mild — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 1169; More sampling of a rare risk gives false confidence right before catastrophe — Mark Blyth, Austerity: The History of a Dangerous…, 113
• DEFINE: Counterperformativity is the book’s central concept; this passage gives a concrete, vivid instance of it at work in margin-setting.

Broader Connections

• Deliberately assuming wild randomness can paradoxically keep markets mild #corroborates (0.85) — Donald MacKenzie, An Engine, Not a Camera, 1169
• Risk-control models based on mild randomness can generate the wild randomness they deny #expands (0.80) — Donald MacKenzie, An Engine, Not a Camera, 1168
• More sampling of a rare risk gives false confidence right before catastrophe #contradicts (0.75) — Mark Blyth, Austerity, 113