Asymmetric Uncertainty

What is Asymmetric Uncertainty? Asymmetric uncertainty is when we don’t know all of the information, it’s uncertain, and the payoff from the uncertainty is asymmetric.

For example, the Coronavirus is an asymmetric uncertainty:

Asymmetric Uncertainty:Properties of the virus that are uncertain will have a substantial impact on whether the policies implemented are effective. For instance, whether contagious asymptomatic carriers exist. These uncertainties make it unclear whether measures such as temperature screening at major ports will have the desired impact. Practically all the uncertainty tends to make the problem potentially worse, not better, as these processes are convex to uncertainty.


Keywords: asymmetric uncertainty, what is asymmetric