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  1. Rob Hansen
    Rob Hansen January 4, 2015 at 7:27 PM |

    I once had a prof who illuminated model risk with the story of the statistician who was hired by the NFL to explore ways to make the game more exciting. The statistician proved people thought punts were boring and a tight correlation existed between punts and fourth downs, so to make the game more exciting the NFL should reduce punts by switching to a three-down system.

    Model risk is real and dangerous, mostly because it’s so hard to discover until it’s too late.

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