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Probability

Most of us understand probability and the likelihood of certain things to happen, or not happening, but still do not fully believe in it. For us, it’s about right and wrong, black or white.

Example: Nate Silver(a numbers guy) said in 2016 that Hillary Clinton has a 72 percent chance to win. This didn’t mean he was wrong when Clinton lost, but most people believed he was.

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MORE IDEAS FROM THE SAME ARTICLE

Probability gets sidelined because:


  • People want certainty, not accuracy. It’s more appealing to make them feel better(with lies, if required) than to give them cold, hard data.
  • There are not many chances to measure our prediction skills, with sufficient sample sizes taking ...

  • The pandemic death toll predictions are probabilities but the newspapers keep them as benchmark numbers which will be held against the experts.
  • In investing, stock predictions that come true are hailed on CNBC, as if those people have some superpower.

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Some downsides are unavoidable

Life is a little easier if you expect a certain chunk of it to go wrong no matter how hard you try.

Smart people screw up. Good people have bad days. Nice people lose their temper.

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Cautiously Optimistic

Our predictions usually seem to fall towards extremes, either too optimistic or too pessimistic. We underestimate how bad things can be in the short term, and how much better they can eventually turn out to be in the longer run. This leads to bad decisions, laughably wrong foreca...

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Common Causes Of Bad Decisions: Social Pressure

  1. People push their moral boundaries due to incentives and rewards.
  2. No one wants to be kicked out of a tribe or community so they play along.
  3. People do not think through the consequences.
  4. Little things and tiny, overlooked details snowball into something big.

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