Why Optimization Fails in Complex Systems

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Correction history

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1. 28 July 2026 · corrected by Emir Baycan

   Qualified three overstated figures: reframed Sheffi's supply-chain resilience findings (40% greater losses, 2.3 additional recovery years) as illustrative figures sometimes cited rather than a precise 29-disruption result; generalized Andrew Lo's VaR-optimization critique to the mechanism (VaR models widely adopted post-Basel) rather than a specific 3-5x amplification factor that could not be verified; and noted the Kiel Institute's $9.6 billion Suez-blockage estimate was one of several differing estimates rather than a single settled figure. The Taleb Antifragile quotation and the Amazon pre-2020 optimization example were accurate and left in place.

   Before

   The article cited a precise Sheffi 40%/2.3-year/29-disruption finding, an Andrew Lo 3-5x VaR amplification estimate, and a single definitive $9.6 billion Kiel Suez-blockage figure.

   After

   Reframed the Sheffi figures as illustrative, generalized the Lo mechanism without the unverifiable multiplier, and noted the Kiel figure was one of several differing estimates.

   Why: The precise multipliers and single-estimate framing were not fully verifiable. Corrections scope the claims rather than adding new sources.

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Full contribution timeline

1. Correction 28 July 2026

   Emir Baycan: Qualified three overstated figures: reframed Sheffi's supply-chain resilience findings (40% greater losses, 2.3 additional recovery years) as illustrative figures sometimes cited rather than a precise 29-disruption result; generalized Andrew Lo's VaR-optimization critique to the mechanism (VaR models widely adopted post-Basel) rather than a specific 3-5x amplification factor that could not be verified; and noted the Kiel Institute's $9.6 billion Suez-blockage estimate was one of several differing estimates rather than a single settled figure. The Taleb Antifragile quotation and the Amazon pre-2020 optimization example were accurate and left in place.

   Proof record →