On A Balance Of Probabilities
Not every lion that chased an antelope caught it, but every lion who caught an antelope, chased it.
Every catch started with a chase. If you saw an antelope running, you'd be wrong to assume a lion will catch it (most chases fail). If you're that antelope, you can't afford to think "most chases fail, so I'll probably be fine." The cost of being wrong is too high.
It's all a matter of perspective.
When weighing probabilities in my mind based on the limited information I have, the default take is to press on with the least likely outcome and underplay the more likely ones, but not to the point of ignoring reality entirely.
For example, I think the weather is one of the most trivial games of probability. The weather has become more and more unpredictable as of late over here and it did rain yesterday which was very unexpected. I don't have the data but also can't remember the last time it rained at this time of the year in the past seven years.
I surprisingly did check the weather forecast yesterday, wanted to put my fingers on what temperature is causing this chilly cold atmosphere. The chance of rain was at 4%, yet it rained! Currently sitting on 2% for today.
Now, common sense says ignore that 2%. Plan for sun, leave the umbrella at home. That's what the numbers tell you to do. And it's not that I'm ignoring the 98% chance of clear skies. I know it probably won't rain.
However, that 4% that turned into actual rain yesterday changed something in how I'm reading these odds. So I will ready an umbrella and a jacket when going out later today.
Thinking in bets
On a less trivial note, Annie Duke's Thinking In Bets book did mention people having this tendency to judge decisions by their outcomes rather than by the quality of the decision at the time it was made.
A field where this is discernable is trading and investing, specifically the former. You can make money on a bad trade and lose money on a good trade.
The process basically ensures one is following sound risk management and probabilistic thinking, and doing such doesn't necessarily guarantee profits in any single instance. Could it be that the real skill is knowing when the percentages don't capture what matters?
This inherent tension between statistical thinking and experiential wisdom isn't always easily resolved.
I'd argue there's wisdom in letting rare events carry emotional weight beyond their statistical frequency given that weather models, market predictions, and most real-world probability estimates are percentage estimates that feel scientific but are really just sophisticated guesses.
Also, I think when we have our brains wired in a certain way after decades of reinforced learning from similar sets of experiences, it's very hard to entertain anything outside of our established pattern recognition, even when the data suggests we should.
Having a poker background taught her, i.e. Annie Duke, that even 80-20 decisions go wrong one-fifth of the time, and crucially, you often don't get enough repetitions in life to let the probabilities even out.
In theory, I might only make five major career moves in my lifetime, more or less. If I hit that 20% bad outcome on move number two, "the odds were in my favor" won't rebuild my career trajectory as neatly as it would across a thousand poker hands.
This is just a different kind of rationality that weighs asymmetric consequences as opposed to symmetric odds. I find the latter easier to calculate and trust, and the former seems underrated for the most part, especially when it goes against conventional wisdom.
Update: it ended up raining again today, however, I was already out and back again when it happened. Lucky me.
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