A closer look.
Risk of ruin is the probability that a stochastic process crosses a specified absorbing boundary over a stated horizon. The probability depends on the model, starting resources, and what counts as ruin.
A useful lens. Not a universal law.
- Different boundaries and time horizons answer different questions. Estimates under a simple model need not describe real-world failure probabilities.
Further reading
A researched reading list is planned for this entry. The current field notes and thinker associations are provisional editorial content.