We live in a society where the reward mechanism is based on the illusion of the regular;our hormonal reward system also needs tangible and steady results. It too thinks that the world is steady and well behaved-it falls for the confirmation error. The world has changed too fast for our genetic makeup. We are alienated from our environment.
Our intuitions are not cut out for nonlinearities. Consider our life in a primitive environment where process and result are closely connected.
These nonlinear relationships are ubiquitous in life. Linear relationships are truly the exception; we only focus on them in classrooms and textbooks because they are easier to understand. Yesterday afternoon i tried to take a fresh look around me to catalog what i could see during day that was linear. I could not find anything, no more than someone hunting for squares or triangles could find them in the rain forest or, any more than someone looking for bell-shape randomness finding it in socioeconomic phenomena.
I will repeat that linear progression, a Platonic idea, is not the norm.
[Silent evidence is the cemetery of failed investors or actors etc. This population is very large and never taking into consideration when we think of the "success" of the survivors. We think that they are gifted "superstars" when they are more lucky Casanovas. Silent evidence is also criminals who are not caught, species that vanished without fossils or [lottery losers]].
Clearly there is an element of surviving Casanovas in us, that of the risk-taking genes, which encourages us to take blind risks, unaware of the variability of possible outcomes. We inherited the taste for uncalculated risk taking.
The reference point argument is as follows: Do not compute odds from the vantage point of the winning gambler (or the lucky Casanova, or the endlessly bouncing back New York, or the invincible Carthage), but from all those who started in the cohort. Consider once again the the example of the gambler. If you look at the population of beginning gamblers taken as a whole, you can be close to certain that one of them (but you do not know in advance which one) will show stellar results just by luck. So, from the reference point of the beginning cohort, this is not a big deal. But from the reference point of the winner (and, who does not, and this is key, take the losers into account), a long string of wins will appear to be to extraordinary an occurrence to be explain by luck. [Human species and anthropic principal or Int.Design malakies]......Why didn't the bubonic plague kill more people? People will supply quantities of cosmetic explanations involving theories about the intensity of the plague and "scientific models" of epidemics. Now try the weakened causality argument that i have just emphasized in this chapter: had the bubonic plague killed more people, the observers (us) would not be here to observe. So it may not necessarily be the property of diseases to spare us humans. Whenever your survival is in play, don't immediately look for causes and effects. The main identifiable reason for our survival of such diseases might simply be inaccessible to us: we are here since, Casanova-style, the "rosy" scenario played out, and if it seems too hard to understand it is because we are too brainwashed by notions of causality and we think that it is smarter to say BECAUSE than to accept randomness.
What is ludic fallacy? Ludic comes from ludus, Latin for games.
In the casino you know the rules, you can calculate the odds, and the type of uncertainty we encounter there is MILD, belonging to Mediocristan. My prepared statement was this: " The casino is the only human venture i know where the probabilities are known, Gaussian (i.e. bell-curve), and almost computable". You cannot expect the casino to pay out a million times your bet, or to change the rules abruptly on you during the game...In real life you do not know the odds; you need to discover them, and the sources of uncertainty are not defined......
Furthermore,just as we tend to underestimate the role of luck in life in general, we tend to overestimate it in games of chance.
"The casino is inside the Platonic fold; life stands outside of it.
A notion of probability that remains fuzzy throughout, as it needs to be,since such fuzziness is the very nature of uncertainty. Probability is a liberal art; it is a child of skepticism, not a tool for people with calculators on their belts to satisfy their desire to produce fancy calculations and certainties.
We humans are the victims of an asymmetry in the perception of random events. We attribute our successes to our skills, and our failures to external events outside our control, namely to randomness. We feel responsible for the good stuff, but not for the bad. This causes us to think that we are better than others at whatever we do for a living. Ninety-four percent of Swedes believe that their driving skills put them in the top 50 percent of Swedish drivers; 84 percent of Frenchmen feel that their lovemaking abilities put them in the top half of french lovers.
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