Dr John and Fat Tony
Let’s get this out of the way first: Nassim Nicholas Taleb is a… difficult character. He can be pretty… reactionary in public forums. Especially Twitter. You might not want to get to know him better. But that doesn’t change the fact that Fooled by Randomness and The Black Swan are both fascinating and thought provoking books1. Be warned: they are both written in a very flippant and meandering style, which I can only describe as “stream of consciousness”. I found both to be difficult, but definitely worth the effort.
The standout idea for me (and so it seems for most others I’ve spoken to about these books) is a spin on a logical fallacy which tends to come up in during probability lessons. The human mind wants to think that if a coin is flipped ten times and comes up heads, they it must be more likely to come up tails next time. It’s sometimes called the gamblers fallacy. The truth is that the chance is always 50/50, regardless of the previous flips. Or is it? Enter Nassim Taleb:
NNT (that is, me): Assume that a coin is fair, i.e., has an equal probability of coming up heads or tails when flipped. I flip it ninety-nine times and get heads each time. What are the odds of my getting tails on my next throw?
Dr. John: Trivial question. One half, of course, since you are assuming 50 percent odds for each and independence between draws.
NNT: What do you say, Tony?
Fat Tony: I’d say no more than 1 percent, of course.
NNT: Why so? I gave you the initial assumption of a fair coin, meaning that it was 50 percent either way.
Fat Tony: You are either full of crap or a pure sucker to buy that “50 pehcent” business. The coin gotta be loaded. It can’t be a fair game. (Translation: It is far more likely that your assumptions about the fairness are wrong than the coin delivering ninety-nine heads in ninety-nine throws.)
This is essentially a version of Occam’s Razor which encourages you to question every complication, even the rules themselves. Why do you believe a tossed coin is fair in the first place? Have you checked?
The upshot of this is that I now try to inspect (and test) the rules of any game, real or metaphorical, I find myself taking part in. Every time I take part.