Conventional studies of uncertainty, whether in statistics, economics, finance or social science, have largely stayed close to the so-called “bell curve”, a symmetrical graph that represents a probability distribution. Used to great effect to describe errors in astronomical measurement by the 19th-century mathematician Carl Friedrich Gauss, the bell curve, or Gaussian model, has since pervaded our business and scientific culture, and terms like sigma, variance, standard deviation, correlation, R-square and the Sharpe ratio are all directly linked to it.

If you read a mutual fund prospectus, or a hedge fund’s exposure, the odds are that it will supply you, among other information, with some quantitative summary claiming to measure “risk”. That measure will be based on one of the above buzzwords that derive from the bell curve and its kin.