Common Probability Errors to Avoid
If you’re trying to gain a rapid understanding of a new area, one of the most important things you can do is to identify common mistakes people make, then avoid them. Here are some of the most …
Probability
Externalities: Why We Can Never Do “One Thing”
No action exists in a vacuum. There are ripples that have consequences that we can and can’t see. Here are the three types of externalities that can help us guide our actions so they don’t come back …
How the Many Sides to Every Story Shape our Reality
“We can select truths that engage people and inspire action, or we can deploy truths that deliberately mislead. Truth comes in many forms, and experienced communicators can exploit its variability to …
The Value of Probabilistic Thinking: Spies, Crime, and Lightning Strikes
Probabilistic thinking is essentially trying to estimate, using some tools of math and logic, the likelihood of any specific outcome coming to pass. It is one of the best tools we have to improve the …
Bayes and Deadweight: Using Statistics to Eject the Deadweight From Your Life
The quality of your life will, to a large extent, be decided by whom you elect to spend your time with. Supportive, caring, and funny are great attributes in friends and lovers. Unceasingly negative …
Mental Model: Misconceptions of Chance
We expect the immediate outcome of events to represent the broader outcomes expected from a large number of trials. We believe that chance events will immediately self-correct and that small sample …
13 Practical Ideas That Have Helped Me Make Better Decisions
This article is a collaboration between Mark Steed and myself. He did most of the work. Mark was a participant at the last Re:Think Decision Making event as well as a member of the Good Judgment …
The Lucretius Problem: How History Blinds Us
The Lucretius Problem is a mental defect where we assume the worst-case event that has happened is the worst-case event that can happen. In so doing, we fail to understand that the worst event that …
Fooled By Randomness: My Notes
I loved Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets by Nassim Taleb. This is the first popular book he wrote, the book that helped propel him into an intellectual …
Leonard Mlodinow: The Three Laws of Probability
“These three laws, simple as they are, form much of the basis of probability theory. Properly applied, they can give us much insight into the workings of nature and the everyday world.” …
Nassim Taleb on the Notion of Alternative Histories
We see what’s visible and available. Often this is nothing more than randomness and yet we wrap a narrative around it. The trader who is rich must know what he is doing. A good outcome means we …
Richard Zeckhauser on Making Better Decisions
Richard Zeckhauser, aka Mr. Probability, is a champion Bridge player and the Frank Ramsey professor of political economy at Harvard University. Speaking about Zeckhauser, Charlie Munger, the brilliant …
Erik Hollnagel: The Search For Causes
A great passage from Erik Hollnagel‘s Barriers And Accident Prevention on the search for causes: Whenever an accident happens there is a natural concern to find out in detail exactly what …
Nate Silver: The Difference Between Risk and Uncertainty
Nate Silver elaborates on the difference between risk and uncertainty in The Signal and the Noise: Risk, as first articulated by the economist Frank H. Knight in 1921, is something that you can put a …
When Storytelling Leads To Unhappy Endings
“The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function.” — F. Scott Fitzgerald *** John Kay, …
Nassim Taleb: The Winner-Take-All Effect In Longevity
Nassim Taleb elaborates on the Copernican Principle, a concept first introduced on Farnam Street in How To Predict Everything. For the perishable, every additional day in its life translates into a …