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Extreme Risks, the Irreversibility of Time and the Retirement Anomaly

Tim Hodgson
CP2013-07

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Abstract — Extreme risks, while very unlikely to occur, matter because we only live once. We live in a single universe and face problems in series, not parallel. Consequently, if we get the one-in-a-million pick we must deal with its consequences. How we would have fared on the other 999,999 paths is of no useful interest at that point.
This paper considers a number of negative extreme risks, focusing more on non-economic risks as these tend to receive less attention. However the paper explicitly considers the economic risk that retirement will be in limited supply.