One of the amazing subtleties in this article... if you're a fast reader you'll stop paying attention to the stories as they go through... kind of amazing that this article is layered like that.
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Heuristics that almost always work
101–110 of 541 posts
Re: Heuristics that almost always work
#102Earlier quoted context omitted.
Also known as the Kelly criterion. If one possible outcome of an action is associated with a great enough loss, it doesn't make sense to perform the action no matter how unlikely the loss.
No, Kelly is about what fraction of your bankroll you should bet if you want to maximize your rate of return for a bet with variable odds. It's essential if you want to: * make money by counting cards at Blackjack (the odds are a function of how many 10 cards are left in the deck) * make money at the racetrack with a system like this https://www.amazon.com/Dr-Beat-Racetrack-William-Ziemba/dp/0... * turn a predictive…
That is a much narrower view of the Kelly criterion than the general concept.
The general idea is about choosing an action that maximises the expected logarithm of the result.
In practise this means, among other things, not choosing an action that gets you close to "ruin", however you choose to measure the result. Another way to phrase it is that the Kelly criterion leads to actions that avoid large losses.
Re: Heuristics that almost always work
#103The security guard still provides value because he deters would-be robbers who have no way of being certain that he is using the wind heuristic
Re: Heuristics that almost always work
#104> The Futurist > He comments on the latest breathless press releases from tech companies. This will change everything! say the press releases. “No it won’t”, he comments. This is the greatest invention ever to exist! say the press releases. “It’s a scam,” he says. He's got the name backwards on this one. What he's describing is more of an anti-futurist. IMHO, futurists and the ones that make implausibly grand predict…
I think the irony here is more pleasing.
Re: Heuristics that almost always work
#105This story reminded me of a story written by a Czech biologist who studied animals in Papua-New Guinea and went to a hunt with a group of local tribesmen. The dusk was approaching, they were still in the forest and he proposed that they could sleep under a tree. The hunters were adamant in their refusal: no, this is dangerous, a tree might fall on you in your sleep and kill you . He relented, but silently considered…
No post body was provided.
Re: Heuristics that almost always work
#106Earlier quoted context omitted.
Also known as the Kelly criterion. If one possible outcome of an action is associated with a great enough loss, it doesn't make sense to perform the action no matter how unlikely the loss.
Isn't that called Pascal's Wager?
Pascal's Wager is a fallacy resulting from plugging infinity into your risk analysis and interpreting ∞/0 in a way that suits you.
Re: Heuristics that almost always work
#107The reasoning in this post is completely backwards: just because a job could be completely replaced with a rock without affecting the majority of cases doesn't mean that the actual practitioners of that job are either completely useless or are themselves on autopilot. Siskind assumes the latter and reasons towards the former, which isn't aligned at all with what actually happens in the world: we do predict hurricanes…
His whole point is that the occasional person who IS "phoning it in all the time" will appear to be very good at their job, possibly better than the people who are really trying their best to get it right.
Re: Heuristics that almost always work
#108Earlier quoted context omitted.
It's a great example. This is the very reason I have scaled back the amount of time I rock climb as I've gotten older -- not because any individual outing is dangerous, but there's an element of Russian roulette wherein the mere act of doing it more often dramatically changes the risk.
> the mere act of doing it more often dramatically changes the risk. Kind of. However, you already know that the first N outings didn't have a disaster. So those should be discarded from your analysis. Doing it N times more has a lot of risk, doing it the N+1th time has barely any.
If you'll die if a roll of three dice comes up sixes, you're not really in a lot of danger. If you do it every day, you have about 15 months to live.
Re: Heuristics that almost always work
#109One could add: The Barking Dog Barks at everything all the time, people learn to ignore it. Then, when there's real danger, no one cares, providing literally no value and becoming only an annoyance. It's kind of like a dual for the security guard one.
I think the best known illustration for this concept is actually called "The boy who cried wolf"
Yes, but one important difference is that on OP's examples there is some sort of system that you put in place for a specific purpose, and it fails to do so in practice.
It would be akin to that lying boy being the officially appointed wolf-spotter for his village.
Re: Heuristics that almost always work
#110Earlier quoted context omitted.
Also known as the Kelly criterion. If one possible outcome of an action is associated with a great enough loss, it doesn't make sense to perform the action no matter how unlikely the loss.
Isn't that called Pascal's Wager?
Which of course directly leads to Pascal's Mugging: I can simply say "I'm a god, give me $10000 or you will burn in hell for all eternity". Now if you follow Pascal's Wager or GP's logic you have to give me the money: I'm probably lying, but the potential downside is too great to risk upsetting me.