Day 54 Post 12 - Ludic Fallacy

Source: http://en.wikipedia.org/wiki/Ludic_fallacy

Ludic fallacy is a term coined by the famous Nassim Nicholas Taleb in his even more famous book "The Black Swan"

Basically it refers to the misuse of games to model real-life situations. In the words of Taleb the fallacy is "basing studies of chance on the narrow world of games and dice."

The basic idea of the book was to refute the use of predictive mathematical modelling used to predict the future. It was an attack on applying naive and simplified statistical models to predict high complex situations.

According to Taleb, statistics only work in some domains like Casinos, in which odds are visible and defined. I haven't read the book, although I did buy both his books over an year ago during my internship in Axis Bank. Yes! I interned in a bank, and in the risk department when I bought the book :p .... But can you blame me, everyone in the Bank had read the book or had it on their desks.

Anyhow back to what I was saying, I haven't read the book, but I think the whole point is that these models are meant when "Risk" (used in statistical sense) is clear and present and not when their is "Uncertainty" or "Ambiguity" (statistical jargon)

In english, when the probabilities or odds of outcomes are known only then are these models useful, in uncertain or ambiguous events where event the probabilities or even the outcomes themselves are not known (much like real life), the mathematical models are useless and only are helpful in assuring investors that their money is safe.

Taleb argues that these models are based on platonified forms (platonic realism refers to the idea of realism regarding existence of universals - and we know nothing is universal except  - "All I know is that I know nothing" - Socrates). Somehow statistics always has to go back to the Greek philosophers

Taleb challenges the concepts of statistics for modelling on the ground

• It is impossible to be in possession of all the information
• Very small variation in a data could have a huge impact (Butterfly Effect - Chaos Theory - Coming Soon)
• Theories/Models based on empirical data are essentially flawed as they do not take into account the events which haven't taken place yet (takes "All I know is that I know nothing" to a whole new level)

Taleb goes on to elucidate this fallacy with examples.
Example 1 - Toin Coss
(Yes it is intentional, just having fun ;p )
Assume there are two people Dr John (man of logical thinking) & Fat Tony (man of wits), both are asked a simple questions
Assume a fair coin is flipped 99 times, and each time it comes up heads. What are the odds that the 100th flip would also come up heads?
Dr John will tell you it is half, as the future event is independent of past events while Fat Tony says that the odds of the coin coming up heads 99 times in a row are so low (less than 1 in 633 billion billion billion) that the initial assumption that the coin had a 50/50 chance of coming up heads is most likely incorrect.

He goes to on to elucidate how the ludic fallacy here is assume that the rules of the hypothetical world apply to the real-life event.

If you had seen a coin come out as Heads 99 times in a rule would you bet Heads or Tails?? .... Sometimes being stupid is the better thing.
 
For more fun story like examples like this read the book ;) .... I know I am going to as soon as I go back home 

Day 51 Blog Post 11 - Science

Source : http://en.wikipedia.org/wiki/Science

Science (from the latian scientia, meaning knowledge) is a systematic enterprise of gathering knowledge and condensing that knowledge into testable theories and laws.

At this some methods prove better than others, the scientific method includes,

• Use of careful observation
• Experiment
• Measurement
• Mathematics
• Replication

A scientific hypothesis is an educated guess about the nature of universe, a scientific theory is one which has been confirmed by repeated observation and measurement. A theory is thus an understanding of the nature of universe which explains the phenomenon with a good accuracy

Scientific fields are broadly  divided into

• Natural sciences : which include all things natural including biology
• Social sciences : which study human behavior and societies

Basically, the difference is in the former you have pretty accurate understanding of what is happening, and hence we have been able to reach the moon :) ... while the latter, keeps getting more and more trickier, ... which is why we still have wars :p .... luckily, now with the emergence of neuroscience and other related fields, the latter is expected to be a part of natural sciences soon.

Now the empirical studies have been in existence since age immortal, but they have been employed only after the middle ages (e.g. Ibn al-Haytham, Abu Rahyan Biruni, and Roger Bacon) and the dawn of sciences is credited to the same era, with the 16th and 17th century being the era of the scientific revolution.

Something I found interesting was that the earliest users of the scientific method include two Muslims and a friar, so much for religion v/s science.

The scientific method seeks to explain nature in a reproducible way, basically to eliminate any lucky chances or personal biases.

First you develop a model or hypothesis and design experiments to test it. The same is then  peer-reviewed (maybe to provide inputs or find faults which the scientist might have missed). After this, independent researchers perform follow up experiments to test the veracity of the hypothesis... and to make sure that the scientist didn't do something naughty with the data from the experiment ;)

Once a hypothesis survives testing, it may become adopted into a framework of scientific theory.... whatever that means :p.... The part I like in this paragraph is Occam's Razor... also known as law of parsimony, basically meaning that if one construct explains all phenonmenon that artificially adding another is of no use... too much jargon?? .... imagine like this, if One Professor, who speaks really technical lingo but knows all there is to know to teach in a school.... and then there are 4 Professors who combined know equal to the first professor, but do so in simpler language, hence students like them more... then Occam's Razor says that first professor is better.

Haha.. I know right... talk about intellectual elitism, but hey! this is science we are talking about.

Mathematics is essential to science because of the support it provides in modelling and testing.

Science is like a religion too in many ways, because it asks you to believe in the knowledge collected by others, now if somebody tells me tommorow that the moon is made out of cheese, I won't believe him, but if  somebody comes out with an repeatable experiment to prove the same, I would have no rebuttal.

Doesn't that make my belief system quite unstable? Actually yes! it does, and like all other people who are unsure, scientists too TALK about their beliefs.... just like aunties gossip about what they and somebody else did was right or wrong in their kitty parties ... Scientists have their own "Communities" which serve the same purpose.

Now, these have 3 broad forms.

• Fields : Basically people who are all working in the same field of science, analogous to aunties living in same neighborhood ... it is a co-opetitive environment (blend of competitive and cooperation)
• Institutions : These people come together and form institutions ... think of it being like alcholics anonymous, these people too come together and tell everyone "Hi! My name is XYZ, and I am a scientist working in area ABC... I need help" .... haha.. boredom is the best !!
• Literature : Ohk, so now these scientists have done their experiments on their hypothesis, they publish them in journals... now journal is nothing but a fancy scientific name for a magazine... and it is no better, it's basic purpose is to establish territory and letting other people know, I have done this, I have take down his flag from there.... Men need to pee on everything!!.. I don't know who said that, but really clever :)

 Now I am sure, by this era nobody counters science, whatever has been scientifically proven is the fact.... but wait... philosophers are the grand-daddies of scientists and they were never gonna leave all the authority to scientists... so they have three basic issues with science :p... on why it is misleading .. they claim that scientific method assumes

• Reality is objective and consistent... I am just scared to imagine it can be anything but that.. but hey!! I am just a kid
• Humans have a capacity to perceive reality accurately..... BIGGEST problem if you ask me... like one of my friends says... perception is everything, if your perception is colored, how can you expect the theory to be accurate
• Rational explanations exist for elements of real world... Haha!!.. you don't want to mess with the philosophers... If science is good at collecting knowledge, philosophy is the still home to wisdom

Besides this... uniformity of law and uniformity of processes across time and space pose other problems... I would explain, but it is way to complicated than I want to cover here... read the wiki if you think if this interests you.

Besides this there are several other critiques but they are baby questions in front of these big daddies!!.. some of them are
1. Science has become manipulative, moved away from being a simple area of collecting knowledge to manipulating nature
2. The growth of science as a whole has no process governing it, and that is has become an ideology with more authority than it justified
3. Science is based on circular pretexts, the process (scientific method) itself has been developed by science only and it only accepts criticisms which come from the same framework which science has setup for itself, hence making it quite narrow in it's approach
4. Carl Jung, stated that science intends to understand all the universe and asks artificial questions, we should focus not on those artificial methods but understand the world in a more holistic manner.

I don't really know what to say now :p.... am super-confused now

Day 33 Post 10 - Dunning-Kruger Effect

Source : http://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect

The Dunning-Kruger effect is a cognitive bias in which people reach erroneous conclusions and make unfortunate decisions because their incompetence robs them of meta-cognitive ability to realize it.

The unskilled therefore suffer from "Illusory Superiority" rating their own ability much higher than actuality. By contrast the highly skilled underrate their capability suffering from illusory inferiority.

Or like the saying we have in the Hindu mythology, quoting Sri Ramakrishna here "A tree laden with fruits always bends low. Humility is a sign of greatness"

But anyhow, what the effect talks about is also called the confidence paradox wherein the less competent people end up rating their capabilities much higher than the competent people.

It goes on to explain how gaining competence can actually weaken self-confidence as because they assume others to have an equivalent understanding, thus the miscalibration of the incompetent stems from the self while the miscalibration of the the competent stems from errors about others.

Basically, the smart assume everyone has figured out what they have, it's "COMMON SENSE" isn't it? But actually these things are not.

What I feel also plays a role is that since the competent are much more adept at figuring out what went wrong than the incompetent they often over-weigh the importance/critcality of the things they are worried about, everyone has what I have figured out and I don't have this figured out.

I love the beautiful quotes somebody has placed in the wiki, this wiki for sure is one of the better wikis. Anyhow here are the quotes

"The best lack all conviction, while the worst are full of passionate intensity" - W.B. Yeats
"In the modern world the stupid are cocksure while the intelligent are full of doubt" - Bertrand Russell

I don't somehow reading the first quote reminds of something Tom Hanks said in the movie Forrest Gump "I might be stupid but I know what love is" ... I don't know how to relate the two, but somehow I feel the two have a connection.

The hypothesis was given by Justin Kruger and David Dunning of Cornell University in 1999. However the phenomenon had been assumed by philosophers over a century ago, as it clear by Bertrand Russell's quote. I think Indians figured this out a long time back ;)

The same results have been replicated in fields as diverse as reading comprehension, operating a motor vehicle, playing chess or tennis.

"Ignorance more frequently begets confidence than does knowledge" - Charles Darwin

They hypothesis includes the following four points,
1. Incompetent individuals often tend to overestimate their own level of skill
2. Incompetent individuals fail to recognize genuine skills in others
3. Incompetent individuals fail to recognize the extremity of their inadequacy
4. If they can be trained to substantially improved their own skill level, these individuals can recognize and acknowledge their own previous lack of skill

The effect is based on the study wherein the researchers conducted tests for logicalreasoning and grammatical skills and then after being shown their test scores they were asked to estimate their ranks.

Wherein the competent group accurately estimated their rank while the incompetent group still overestimate their own rank.

Across four studies, the authors found that participants scoring in the bottom quartile on tests of humor, grammar and logic overestimated their test performance and ability. Although test scores put them in the 12th percentile, they estimated themselves to be in the 62nd. Talk about overestimation

While on the other hand, the ones with true knowledge tended to underestimate their competence. Roughly people who found the exercises too easy expected them to just as easy for everyone else

Now, I just found all this to be smart, maybe because I have a proclivity and interest in such things, but some people found one of their research papers really funny and they even have an Ig Nobel to their credit for the year 2000. =)

A further research by the guys indicate that people who had been tutored were able to estimate their rank better and realize the previous lack of social.

Now, something of a tangent, we humans as I understand are still primates still quite hierarchical in our arrangements and for social skill a key importance is realizing your worth and rank in the groups. A gross estimation could lead to something similar to the young gorillas who get killed for messing with the high rank males (I learnt this from Sapolsky, I will do my next blog on something by him).

In 2003 Dunning conducted a study with Joyce Ehrlinger, also of Cornell University about confidence and social cues. They studied the effect of positive and negative social cues on people's estimation of their ranks. People given positive cues tended to overestimate their ranks, while people given negative cues tended to underestimate their rank. Now the wiki doesn't talk much about social cues, but come on, we all know that a lot of times, these social cues have nothing to with competence, somebody pleasant looking will get much more positive social cues, somebody with a nurturing parents and peer group will tend to again receive a lot more of them. Not that there is anything wrong with being aesthetic or having nice people around you, just it would be nice if we are aware of this phenomenon.

I think this is one of the reasons why we are often told to avoid negative people, because people tend to give more negative cues, and thus their negativity can get to you and you will end up underestimating yourself, but just like that, be wary of overly positive people too because they might inflate your ego to the sky and after you up like a helium balloon bursting and coming down is no fun.

=) and we are done with 10.. now in two digits, now I know that I am starting slow, but don't worry, I intend to fulfill this project as intended for myself.