Learning Bayesian Statistics

Proudly sponsored by PyMC Labs, the Bayesian Consultancy. Book a call, or get in touch!

I love Bayesian modeling. Not only because it allows me to model interesting phenomena and learn about the world I live in. But because it’s part of a broader epistemological framework that confronts me with deep questions — how do you make decisions under uncertainty? How do you communicate risk and uncertainty? What does being rational even mean?

Thankfully, Gerd Gigerenzer is there to help us navigate these fascinating topics. Gerd is the Director of the Harding Center for Risk Literacy of the University of Potsdam, Germany.

Also Director emeritus at the Max Planck Institute for Human Development, he is a former Professor of Psychology at the University of Chicago and Distinguished Visiting Professor at the School of Law of the University of Virginia. 

Gerd has written numerous awarded articles and books, including Risk Savvy, Simple Heuristics That Make Us Smart, Rationality for Mortals, and How to Stay Smart in a Smart World.

As you’ll hear, Gerd has trained U.S. federal judges, German physicians, and top managers to make better decisions under uncertainty.

But Gerd is also a banjo player, has won a medal in Judo, and loves scuba diving, skiing, and, above all, reading.

Our theme music is « Good Bayesian », by Baba Brinkman (feat MC Lars and Mega Ran). Check out his awesome work at https://bababrinkman.com/ !

Thank you to my Patrons for making this episode possible!

Yusuke Saito, Avi Bryant, Ero Carrera, Giuliano Cruz, Tim Gasser, James Wade, Tradd Salvo, William Benton, James Ahloy, Robin Taylor,, Chad Scherrer, Zwelithini Tunyiswa, Bertrand Wilden, James Thompson, Stephen Oates, Gian Luca Di Tanna, Jack Wells, Matthew Maldonado, Ian Costley, Ally Salim, Larry Gill, Ian Moran, Paul Oreto, Colin Caprani, Colin Carroll, Nathaniel Burbank, Michael Osthege, Rémi Louf, Clive Edelsten, Henri Wallen, Hugo Botha, Vinh Nguyen, Marcin Elantkowski, Adam C. Smith, Will Kurt, Andrew Moskowitz, Hector Munoz, Marco Gorelli, Simon Kessell, Bradley Rode, Patrick Kelley, Rick Anderson, Casper de Bruin, Philippe Labonde, Michael Hankin, Cameron Smith, Tomáš Frýda, Ryan Wesslen, Andreas Netti, Riley King, Yoshiyuki Hamajima, Sven De Maeyer, Michael DeCrescenzo, Fergal M, Mason Yahr, Naoya Kanai, Steven Rowland, Aubrey Clayton, Jeannine Sue, Omri Har Shemesh, Scott Anthony Robson, Robert Yolken, Or Duek, Pavel Dusek, Paul Cox, Andreas Kröpelin, Raphaël R, Nicolas Rode, Gabriel Stechschulte, Arkady, Kurt TeKolste, Gergely Juhasz, Marcus Nölke, Maggi Mackintosh, Grant Pezzolesi, Avram Aelony, Joshua Meehl, Javier Sabio, Kristian Higgins, Alex Jones, Gregorio Aguilar, Matt Rosinski, Bart Trudeau and Luis Fonseca.

Visit https://www.patreon.com/learnbayesstats to unlock exclusive Bayesian swag 😉

Links from the show:

Abstract

by Christoph Bamberg

In this episode, we have no other than Gerd Gigerenzer on the show, an expert in decision making, rationality and communicating risk and probabilities. 

Gerd is a trained psychologist and worked at a number of distinguished institutes like the Max Planck Institute for Human Development in Berlin or the University of Chicago. He is director of the Harding Center for Risk Literacy in Potsdam. 

One of his many topics of study are heuristics, a term often misunderstood, as he explains. We talk about the role of heuristics in a world of uncertainty, how it interacts with analysis and how it relates to intuition.

Another major topic of his work and this episode are natural frequencies and how they are a more natural way than conditional probabilities to express information such as the probability of having cancer after a positive screening. 

Gerd studied the usefulness of natural frequencies in practice and contributed to them being taught in high school in Bavaria, Germany, as an important tool to navigate the real world.

In general, Gerd is passionate about not only researching these topics but also seeing them applied outside of academia. He taught thousands of medical doctors how to understand and communicate statistics and also worked on a number of economical decision making scenarios.

In the end we discuss the benefits of simpler models for complex, uncertain situations, as for example in the case of predicting flu seasons.

Transcript

This is an automatic transcript and may therefore contain errors. Please get in touch if you’re willing to correct them.

Transcript
Speaker:

Gert Gigerentzer, welcome to Learning

Vision Statistics.

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I'm glad to be here.

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Yeah, thanks a lot for taking the time.

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I am very happy to have you on the show.

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A few patrons have asked for your episode,

so I'm glad to have you here today.

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And thank you very much to all of you in

the Slack, in the LBS Slack who

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recommended Gert for an episode on the

show.

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And yeah, I have a lot of questions for

you because you've done a lot of things.

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You have a lot of, there is a lot of

questions I want to ask you on a lot of

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different topics, but first, as usual,

let's start with your origin story.

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Geert, and basically, how did you come to

the world of study of rationality and

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decision-making under uncertainty?

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Now, I have been observing myself, how I

make decisions.

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For instance, in an earlier career, I was

a musician playing dixieland, jazz, and

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other things.

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And when I did my PhD work, I had to make

a decision.

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Was I want to continue a career on the

stage as a musician or to try an academic

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career?

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Mm-hmm.

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And for me, music was the safe option,

because I knew, and also I earned much

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more money than an assistant professor.

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And an academic career, I couldn't know

whether I could make it, whether I would

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ever become a professor, but it was the

risky option.

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So this is, if you want an initial story,

I decided then to take the uncertainty at

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risk.

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That makes sense.

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And so that was like pretty early in your

career, or is that something that came

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later on when you already had started

studying other things, or you started

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doing that as soon as you started your

undergrad studies?

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What came later was that I learned about

theories about decision making, and some

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of them I found very unrealistic and

strange, and about topics that were not

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really the topics where I thought are

important, like which job do you take,

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what do you do with the rest of your life,

but were of monetary gambles, was it you

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want a hundred dollars for sure, or two

hundred with a probability of 0.4?

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or six.

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And I also spent an important year of my

life at the Center for Interdisciplinary

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Research in Bielefeld on a group called

the Probabilistic Revolution.

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That's an international and

interdisciplinary group that investigated

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how science changed from a deterministic

worldview to a probabilistic one.

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And I learned so much.

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I was one of the young guys in this group.

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There were people like Thomas Kuhn, Ian

Hacking, Nancy Cartwright.

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And that also taught me something.

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It's important not to read in your own

discipline and do what the others do.

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But to fall in love is a topic like

decision making and uncertainty in the

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real world.

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And then read everything.

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that people have written about that.

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And that means from areas like biology,

animal behavior, to economics, to

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sociology, to the history of science.

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Yeah, that was something really

interesting when preparing the episode

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with you to see the whole arc of your

career being basically around these topics

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that you've studied really a lot and

in-depth.

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So that was really super interesting to

notice.

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And so something I'm wondering is, if you

remember...

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how you first got introduced to Bayesian

methods.

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Now, for instance, I read Fisher's book,

Statistic Methods and

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Mm-hmm.

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Thomas Bayes for having the insight not to

publishing his paper.

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Because, according to Fisher, that's not

what you need in science.

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And I got very much interested in the

fights between statisticians, in something

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that could be called insult and injury.

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And Fisher, for instance, in the same

book, he destroys Carl Pearson, his

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successor, saying

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the terrible weakness of his mathematical

and scientific work flowed from his

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incapacity of self-criticism.

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So if you want to get anyone interested in

statistics, then start with the

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controversies.

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That's my advice.

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And the pity is that in the textbooks, in

psychology certainly,

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All the controversies have been

eliminated, one doesn't mention them, and

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talks as if there would be only one kind

of statistics.

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So that could be Fisher's null hypothesis

testing, which has been turned in a very

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strange ritual, Fisher never would accept,

or on the other side there are also

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Bayesians who think it's the only tool in

the toolbox.

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And the knees of that attitude is

realistic, it's more religious.

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There is a statistical toolbox.

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And there are different instruments and

you need to look at the problem to choose

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the right one.

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And also within bass, there are so many

different kinds of bassianism.

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There's not one.

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64,000.

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It's a lot.

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Yeah, so, okay, that makes it clear.

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And that helps me also understand your

work because, yeah, something I saw is in

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your work, you often emphasize the role of

heuristics in decision-making.

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So I'm curious if you could explain how

Bayesian thinking and heuristics intersect

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and...

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how do these approaches complement each

other in navigating uncertainty?

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First, the term heuristic is often

misunderstood.

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I mean the term in the sense that Herbert

Simon used it to make a computer program

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smart, or the Gestalt psychologist used

it, or Einstein used it in the title of

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his Nobel Prize winning paper of 1905.

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I don't use it in the sense that it has

been very popular in psychology and other

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fields.

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as heuristics and biases.

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That's a clear misunderstanding.

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So to make it very short, in a world that

Jimmy Savage, who is often called the

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father of Bayesian statistics, called a

small world where the entire state space

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is known and nothing else can happen.

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In that world,

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This is the ideal world for Bayesianism

and also for most of statistics.

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In a world where you do not know the state

space that the economist Frank Knight

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called uncertainty, or as I have called

true uncertainty or radical uncertainty,

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you can't optimize by definition.

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You cannot find the best solution.

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And here...

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People and other animals, just like

managers and scientists, use heuristics.

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So a heuristic is a rule that helps you,

under uncertainty, to find a good

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solution.

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For instance, Polia, the mathematician

distinguished between analysis and

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heuristics.

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You need heuristics to find a proof and

you need analysis to check.

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whether it was right.

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Most important, heuristics and analysis

are not opposites, as it's now become very

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popular in system one and system two

theories.

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They're not opposites.

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They go together.

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And for instance, a study of 17 noble

laureates reported that almost all of them

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attributed there.

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success from going back and forth between

heuristics slash intuition or analysis.

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So that's an important thing.

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It's not binary opposites.

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So your question, where does Bayes meet

heuristics?

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Now, of course, for instance, in the

determination of the prior probability

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distribution, uniform

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That's also known as one over N.

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So you divide, for instance, your assets

equally over the funds or the stocks that

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you have.

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It's a reasonable assumption when you know

little.

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And just as one over n is reasonable, in

some situations it's not always.

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And the real challenge is to find out in

what situation does a certain heuristic or

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does space work, and where does it not

work.

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That's what I call the study of ecological

rationality.

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So in short, there's no single tool that's

always the best.

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We need to face...

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The difficult question, can we identify

the structure of environments where a

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simple heuristic like equal distribution

or imitate others works and where does it

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mislead?

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Hehehe

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Yeah, yeah, this is really interesting

because something also I'm always like, I

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always try to reconcile and actually you

talk about it in your book, Gut Feelings,

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The Intelligence of the Unconscious.

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And you talk also about intuitions and how

they can sometimes outperform more complex

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analytical processes.

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And this is a claim that you can see in a

lot of fields, right?

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From, I don't know, politics to medicine

to sports, when basically people don't

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really want the analytical process to be

taken too seriously because maybe it

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doesn't go, it doesn't confirm their...

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Yeah.

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their previous analysis or their own bias.

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So what I'm wondering is how do Bayesian

methods in your research, how do Bayesian

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methods accommodate the role of intuitive

judgment and how can individuals strike a

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balance between intuitive thinking and the

systematic updating of beliefs that we use

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under Bayesian reasoning?

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So let me first define what I mean by

intuition.

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So intuition is a kind of unconscious

intelligence that is based on years of

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experience with a topic where one feels

quickly what one should do, what one

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should not do, but one cannot explain it.

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So when a doctor sees a patient and the

doctor may feel something is wrong with

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that patient but cannot explain it, that's

an intuition based on years of experience.

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And then the doctor will go on and do

tests and analysis in order to find out

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what's wrong if there's something.

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So remember, intuition and analysis are

the same.

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always go together.

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It's a big error what we have today in

so-called dual processing theories, where

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they're presented as opposites.

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And then usually one side is always right,

like analysis and intuition is blamed, and

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heuristics are blamed if things go wrong.

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I see.

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Yeah.

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And so how does that then integrate into

the Bayesian framework according to you?

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Like in the systematic analysis of beliefs

that we have in the Bayesian framework.

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So applications of Bayes use heuristics

such as 1 over n, so equal distribution,

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equal priors.

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And they also use a more silent

independence assumption and such things.

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But I would not phrase the problem as how

to integrate heuristics in the Bayesian

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framework.

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I would also not say...

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how to integrate Bayes in the heuristics

framework.

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I think of both, so there are many

Bayesian methods and also other

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statistical methods, the old optimizing

methods, and there are heuristic methods

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which are non-optimizing methods.

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I think of them as part of an adaptive

toolbox that humans have, that they can

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use, and the real art is the choice of the

right.

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tool.

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So when I should use base and what kind of

base or when should I use a heuristic, a

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social heuristic, for instance do what

Alex tells me to do or for instance simple

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heuristics like take the best which just

go lexicographically through reasons and

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stop with the first one that allows to

make a decision.

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And that's the question of ecological

rationality.

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I see.

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And do you have, yeah, do you have

examples?

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Bayes' rule is a rule that is reasonable

to apply in situations where the world is

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stable, where no unexpected things happen,

where you have good estimates for the

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priors and also good estimates for the

likelihoods.

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For instance, mammography screening is a

case.

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So...

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We know that the, or we can expect that

the results of mammography screening won't

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change very much.

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We have to take in account that the base

rates differ from country to country or

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00:17:36,922 --> 00:17:38,363

from group to group.

203

00:17:38,543 --> 00:17:49,526

But besides that, it is a good framework

to understand what is the probability that

204

00:17:49,526 --> 00:17:51,926

a person has breast cancer.

205

00:17:51,932 --> 00:17:53,754

if she tests positive.

206

00:17:54,445 --> 00:17:55,197

Mm-hmm.

207

00:17:55,499 --> 00:17:57,080

But that's a good situation.

208

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But if you have something which is highly

volatile, like, okay, I worked with the

209

00:18:03,385 --> 00:18:11,832

Bank of England on a method for

regulation, for banking regulation, and

210

00:18:11,832 --> 00:18:15,856

that role is highly volatile, and you're

not getting very far with standard

211

00:18:15,856 --> 00:18:17,356

statistical methods.

212

00:18:17,937 --> 00:18:24,482

But you may evaluate whether a bank is in

troubles.

213

00:18:24,971 --> 00:18:30,474

by something that we call a fast and

frugal tree that only looks at maybe three

214

00:18:30,474 --> 00:18:41,860

or four important variables and doesn't

combine them in a way as base or as linear

215

00:18:42,040 --> 00:18:44,821

models do, but lexicographic.

216

00:18:45,362 --> 00:18:46,182

Why?

217

00:18:46,423 --> 00:18:52,586

Because, so if you first look, for

instance, think about medical diagnosis.

218

00:18:54,855 --> 00:19:00,898

If your heart fails, a good kidney cannot

compensate that.

219

00:19:02,479 --> 00:19:07,541

And this is the idea of lexicographic

models.

220

00:19:07,742 --> 00:19:13,485

And a number of heuristics are

lexicographic, as opposed to compensatory

221

00:19:13,485 --> 00:19:17,666

models like Bayes or linear regressions.

222

00:19:20,082 --> 00:19:21,388

Oh, I see, okay.

223

00:19:23,242 --> 00:19:24,268

Yeah, continue.

224

00:19:25,083 --> 00:19:35,485

Yeah, I have myself trained about a

thousand doctors in understanding and

225

00:19:35,485 --> 00:19:39,346

doing Bayesian diagnosis and Bayesian

thinking.

226

00:19:40,707 --> 00:19:48,689

And you should realize that most doctors

and also most gynecologists would not be

227

00:19:48,689 --> 00:19:52,250

able to answer the question I posed

before.

228

00:19:52,510 --> 00:19:53,550

What is the...

229

00:19:53,739 --> 00:20:00,581

probability that a woman has breast cancer

in screening when the mammogram is

230

00:20:00,581 --> 00:20:01,562

positive.

231

00:20:03,175 --> 00:20:09,356

And if I give them the numbers in

conditional probabilities, they're equally

232

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lost.

233

00:20:10,897 --> 00:20:12,357

Alex, I do a test with you.

234

00:20:12,357 --> 00:20:13,397

Are you ready?

235

00:20:14,578 --> 00:20:21,820

So the point will be, I give you the

information in, as usual, in conditional

236

00:20:21,820 --> 00:20:23,000

probabilities.

237

00:20:23,560 --> 00:20:25,540

And I hope you will be confused.

238

00:20:26,141 --> 00:20:28,661

And also, to readers, the listeners.

239

00:20:29,102 --> 00:20:32,562

And then I give you the same.

240

00:20:33,047 --> 00:20:37,368

information in what we call natural

frequencies.

241

00:20:37,968 --> 00:20:40,609

And then insight will come.

242

00:20:40,609 --> 00:20:41,429

Ready?

243

00:20:41,589 --> 00:20:42,509

Okay.

244

00:20:42,509 --> 00:20:45,190

So assume you conduct a mammography

screening.

245

00:20:45,190 --> 00:20:52,452

What you know is that among the group of

women who participates, there is a one

246

00:20:52,452 --> 00:20:56,793

percent chance that a woman has breast

cancer undetected.

247

00:20:57,273 --> 00:21:02,659

You also know that the probability that a

woman has positive if she

248

00:21:02,659 --> 00:21:04,799

as breast cancer is 90%.

249

00:21:06,000 --> 00:21:11,464

And you know that the probability that

women should test positive if she does not

250

00:21:11,464 --> 00:21:13,444

have breast cancer is 9%.

251

00:21:14,025 --> 00:21:14,825

Okay?

252

00:21:15,126 --> 00:21:24,451

You have a base rate of 1%, a sensitivity

or hit rate of 90%, and a falls alarm rate

253

00:21:24,451 --> 00:21:25,691

of 9%.

254

00:21:26,012 --> 00:21:31,187

Now a woman in that group just tested

positive and you know nothing.

255

00:21:31,187 --> 00:21:36,470

about her because it's creamy, ask you,

doctor, tell me, do I now have breast

256

00:21:36,470 --> 00:21:37,350

cancer?

257

00:21:37,350 --> 00:21:39,712

Or how certain is it?

258

00:21:39,712 --> 00:21:43,313

99%, 90, 50, please tell me.

259

00:21:43,314 --> 00:21:44,434

What do you say?

260

00:21:45,575 --> 00:21:51,618

If there is now fog in your mind, that's

the typical situation of most doctors.

261

00:21:52,088 --> 00:21:52,819

Mm-hmm.

262

00:21:54,607 --> 00:22:00,548

And there have been conclusions made in

psychological research that the human mind

263

00:22:00,548 --> 00:22:06,110

has not evolved to think statistically, or

here, the Bayesian way.

264

00:22:06,610 --> 00:22:10,371

Now the problem is not in the mind, the

problem is in the representation of the

265

00:22:10,371 --> 00:22:11,471

information.

266

00:22:11,631 --> 00:22:15,412

Conditional probabilities are something

quite new.

267

00:22:16,333 --> 00:22:19,093

And few of us have been trained in it.

268

00:22:19,994 --> 00:22:23,647

Now how did humans...

269

00:22:23,647 --> 00:22:27,548

before Thomas Bass.

270

00:22:28,216 --> 00:22:28,968

Mm-hmm.

271

00:22:29,967 --> 00:22:38,532

or animals do based on reasoning, not

conditional probabilities, but what we

272

00:22:38,532 --> 00:22:40,534

call natural frequencies.

273

00:22:40,534 --> 00:22:44,776

That is, I give you first a demonstration,

then explain what it is.

274

00:22:44,957 --> 00:22:47,659

Okay, we use the same situation.

275

00:22:47,659 --> 00:22:55,164

You do the mammography screening and

translate the probabilities into concrete

276

00:22:55,164 --> 00:22:55,844

frequencies.

277

00:22:55,844 --> 00:22:57,165

Okay?

278

00:22:57,165 --> 00:22:59,646

Think about a hundred women.

279

00:23:00,783 --> 00:23:06,046

We expected one of them has breast cancer

and she likely tests positive.

280

00:23:06,046 --> 00:23:07,427

That's the 90%.

281

00:23:08,368 --> 00:23:16,393

Among the 99 who do not have breast

cancer, we expected another 9 will

282

00:23:16,393 --> 00:23:18,955

nevertheless test positive.

283

00:23:19,055 --> 00:23:23,398

So we have a total of 10 who test

positive.

284

00:23:23,398 --> 00:23:27,921

Question, how many of them do actually

have cancer?

285

00:23:28,101 --> 00:23:30,602

It's one out of 10.

286

00:23:31,767 --> 00:23:38,948

So a woman who tests positive in screening

has most likely not cancer.

287

00:23:38,948 --> 00:23:40,249

That's good news.

288

00:23:41,369 --> 00:23:44,550

So that's natural frequencies and you

basically see through.

289

00:23:44,970 --> 00:23:49,611

And natural frequencies, we call them

because they're not relative frequencies.

290

00:23:49,811 --> 00:23:51,372

They're not normalized.

291

00:23:51,492 --> 00:23:56,073

You start with a group like 100 and you

just break it down.

292

00:23:56,553 --> 00:24:00,554

And then the computation becomes very

simple.

293

00:24:01,867 --> 00:24:04,728

just imagine Bayes rule for this problem.

294

00:24:05,869 --> 00:24:12,572

And then natural frequencies does the

computation, the representation.

295

00:24:12,572 --> 00:24:18,195

It's just one out of the total number of

positives, 10.

296

00:24:18,215 --> 00:24:19,116

That's all.

297

00:24:19,636 --> 00:24:25,519

And once doctors have learned that and

tried with a few problems, they can

298

00:24:25,519 --> 00:24:30,002

generalize it and use the method for other

problems.

299

00:24:30,262 --> 00:24:31,662

And then we can avoid.

300

00:24:32,495 --> 00:24:42,880

the errors that are currently still in

place and also doctors can better

301

00:24:42,880 --> 00:24:49,822

understand what tests like HIV tests or

pregnancy tests actually mean.

302

00:24:52,179 --> 00:24:57,723

And the interesting theoretical point is,

as Herbert Simon said, the solution to the

303

00:24:57,723 --> 00:25:00,024

problem is in its representation.

304

00:25:00,425 --> 00:25:03,026

And he asked it from the Gestalt

Psychologist.

305

00:25:08,874 --> 00:25:10,315

Yeah, this is really interesting.

306

00:25:10,315 --> 00:25:11,676

I really love the...

307

00:25:11,676 --> 00:25:18,261

And in a way that's quite simple, right,

to just turn to natural frequencies.

308

00:25:18,261 --> 00:25:24,386

So I really love that because it gives a

simple solution to a problem that is

309

00:25:24,386 --> 00:25:27,269

indeed quite pronounced, right?

310

00:25:27,269 --> 00:25:29,210

Where it's just like when you're...

311

00:25:29,430 --> 00:25:35,095

Even if you're trained in statistics, you

have to make the conscious effort of not

312

00:25:35,095 --> 00:25:38,126

falling into the fallacy of...

313

00:25:38,126 --> 00:25:43,668

thinking, well, if the woman has a

positive test and the test has a 99% hit

314

00:25:43,668 --> 00:25:48,490

rate, she's got a 99% probability of

having breast cancer.

315

00:25:50,030 --> 00:25:54,692

I have one part of my brain which knows

that completely because I deal with

316

00:25:54,692 --> 00:25:58,854

statistics all the time, but there is

still the intuitive part of my brain,

317

00:25:58,874 --> 00:26:05,016

which is like, wait, why should I even

wonder if that's the true answer?

318

00:26:05,016 --> 00:26:07,717

So I like the fact that natural

frequencies

319

00:26:09,058 --> 00:26:13,160

kind of an elegant and simple solution to

that issue.

320

00:26:14,221 --> 00:26:21,184

And so I will put in the show notes your

paper about natural frequencies and also

321

00:26:21,665 --> 00:26:26,428

the one you've written about HIV screening

and how that relates to natural

322

00:26:26,428 --> 00:26:27,088

frequencies.

323

00:26:27,088 --> 00:26:30,530

So that's in the show notes for listeners.

324

00:26:30,690 --> 00:26:37,513

And I'm also curious, basically

concretely,

325

00:26:37,718 --> 00:26:42,600

how you did that with the professionals

you've collaborated with.

326

00:26:42,600 --> 00:26:47,063

Because your work has involved

collaborating with professionals from

327

00:26:47,063 --> 00:26:48,523

various domains.

328

00:26:49,024 --> 00:26:52,286

That means physicians, that means judges.

329

00:26:52,646 --> 00:27:01,371

I'm curious how you have applied these

principles of risk communication in

330

00:27:01,711 --> 00:27:06,033

practice with these professionals and what

challenges.

331

00:27:06,079 --> 00:27:09,377

and what successes have emerged from these

applications.

332

00:27:09,431 --> 00:27:18,213

Yeah, so I have always tried to connect my

theoretical work with practical work.

333

00:27:18,833 --> 00:27:25,435

So in that case of the doctors, I have

been teaching continuing medical education

334

00:27:26,416 --> 00:27:27,776

for doctors.

335

00:27:27,796 --> 00:27:33,558

So the courses that I give, they are

certified and the doctors gets points for

336

00:27:33,558 --> 00:27:34,278

that.

337

00:27:36,419 --> 00:27:49,791

and it may be a group of 150 or so doctors

who are assembled to a day or two days of

338

00:27:49,791 --> 00:27:54,294

continuing medical education, and I may do

two hours with them.

339

00:27:58,004 --> 00:28:05,570

And that has been for me a quite

satisfying experience because the doctors

340

00:28:05,570 --> 00:28:12,135

are grateful because they have muddled

through these things for their lives.

341

00:28:12,275 --> 00:28:14,537

And now they realize there's a simple

solution.

342

00:28:14,537 --> 00:28:18,520

They can learn within a half an hour or

so.

343

00:28:19,180 --> 00:28:22,082

And then it sticks for the rest of their

lives.

344

00:28:23,731 --> 00:28:33,935

I've also trained in the US, so I have

lived many years in the US and taught as a

345

00:28:33,935 --> 00:28:36,436

professor at the University of Chicago.

346

00:28:36,956 --> 00:28:44,099

And I have trained together with a program

from George Mason University, US Federal

347

00:28:44,099 --> 00:28:45,199

Churches.

348

00:28:45,840 --> 00:28:50,201

These are very smart people and I enjoyed

that.

349

00:28:50,582 --> 00:28:52,422

So these trainings were...

350

00:28:53,059 --> 00:28:56,380

and in illustrious places like Santa Fe.

351

00:28:57,481 --> 00:29:03,344

And the churches were included and their

partners also included.

352

00:29:03,824 --> 00:29:09,807

And there was also a series of things like

about how to understand fibers.

353

00:29:12,789 --> 00:29:20,553

And I was teaching them how to understand

risks and decision making and heuristics.

354

00:29:21,774 --> 00:29:22,434

And...

355

00:29:22,855 --> 00:29:31,265

If you think that federal churches who are

among the best ones in the US would

356

00:29:31,265 --> 00:29:34,729

understand Bayes' rule, good luck.

357

00:29:34,729 --> 00:29:37,592

No, there may be a few, most not.

358

00:29:38,814 --> 00:29:43,358

And actually, by the way, Bayes' rule is

forbidden in UK law.

359

00:29:46,337 --> 00:29:46,991

interesting.

360

00:29:46,991 --> 00:29:54,334

And so, but going back, these are examples

of training that every psychologist could

361

00:29:54,334 --> 00:29:56,634

do.

362

00:29:56,634 --> 00:30:03,677

But you have to leave your lab and go

outside and talk to doctors and have

363

00:30:03,677 --> 00:30:06,678

something to offer them for teaching.

364

00:30:07,559 --> 00:30:15,962

By now, the term natural frequencies is a

standard term in evidence-based medicine.

365

00:30:15,962 --> 00:30:16,855

And I'm very...

366

00:30:16,855 --> 00:30:18,115

proud about that.

367

00:30:19,555 --> 00:30:24,617

And many, there's also a review, a

Cochrane's review has looked at various

368

00:30:24,617 --> 00:30:29,518

representations and found that natural

frequencies are among the most powerful

369

00:30:29,518 --> 00:30:30,218

ones.

370

00:30:31,699 --> 00:30:38,641

And we have with some of our own students

who were more interested in children than

371

00:30:38,641 --> 00:30:45,682

in doctors, we have posed us the question,

can we teach children?

372

00:30:46,235 --> 00:30:47,515

and how early.

373

00:30:49,297 --> 00:30:53,279

And one of the papers I sent you, it's a

paper in the Journal of Experimental

374

00:30:53,279 --> 00:31:02,005

Psychology General, I think two years ago,

has for the first time tested fourth

375

00:31:02,005 --> 00:31:08,430

graders, fifth graders, sixth graders, and

second graders.

376

00:31:08,970 --> 00:31:14,314

So when we did this with the teachers,

they were saying, and they were looking at

377

00:31:14,314 --> 00:31:15,319

the problems,

378

00:31:15,319 --> 00:31:19,200

They were saying, no, that's much too

difficult.

379

00:31:19,540 --> 00:31:21,981

The children will not be able to do that.

380

00:31:22,301 --> 00:31:24,282

They haven't even had fractions.

381

00:31:25,022 --> 00:31:27,123

But you don't need fractions.

382

00:31:28,444 --> 00:31:35,206

And for instance, when we use problems,

they are more childlike.

383

00:31:35,567 --> 00:31:38,348

So here we put that type of problems.

384

00:31:39,728 --> 00:31:45,390

And when they are in natural frequencies,

385

00:31:45,415 --> 00:31:47,556

And the numbers are two-digit numbers.

386

00:31:47,556 --> 00:31:52,157

You can't do larger numbers with fourth

graders.

387

00:31:53,398 --> 00:31:58,941

Then the majority of the fourth graders

got the exact Bayesian answer.

388

00:31:59,541 --> 00:32:03,043

Of course, with conditional probabilism,

it would be totally lost.

389

00:32:04,263 --> 00:32:10,366

And also we have found that some, maybe

20% of the second graders find the

390

00:32:10,366 --> 00:32:11,526

Bayesian answer.

391

00:32:13,459 --> 00:32:18,368

The title of the paper is Our Children

Intuitive Basients.

392

00:32:18,910 --> 00:32:21,461

Yeah, it's in the show notes.

393

00:32:21,711 --> 00:32:25,252

And again, it's in the representation.

394

00:32:26,133 --> 00:32:33,597

It's a channel message in mathematics,

that representation of numbers matter.

395

00:32:34,698 --> 00:32:40,161

And if you don't believe it, just think

about doing a calculation or base rule

396

00:32:40,161 --> 00:32:41,982

with Roman numerals.

397

00:32:41,982 --> 00:32:44,163

Good luck.

398

00:32:44,703 --> 00:32:49,306

And that's well known in mathematics.

399

00:32:49,306 --> 00:32:50,946

For instance, the physicist...

400

00:32:52,179 --> 00:33:03,246

Feynman has made a point that

mathematically equally forms of a formula,

401

00:33:04,408 --> 00:33:08,470

or despite their mathematically

equivalent, they're not psychologically

402

00:33:08,470 --> 00:33:09,431

the same.

403

00:33:09,511 --> 00:33:15,855

Because, as I said, you can see new

directions, new guesses, new theories.

404

00:33:16,996 --> 00:33:20,758

In psychology, that is not always

realized.

405

00:33:21,191 --> 00:33:28,453

And what Feynman, Richard Feynman was

talking about would be called framing in

406

00:33:28,453 --> 00:33:29,634

psychology.

407

00:33:29,894 --> 00:33:35,016

And by many of my colleagues, it's

considered an error to pay attention to

408

00:33:35,016 --> 00:33:35,916

framing.

409

00:33:36,216 --> 00:33:37,297

It's not.

410

00:33:38,517 --> 00:33:42,278

It's an enabler for intelligent

decision-making.

411

00:33:47,774 --> 00:33:48,834

Yeah, this is fascinating.

412

00:33:48,834 --> 00:33:49,475

I really love that.

413

00:33:49,475 --> 00:33:55,860

And I really recommend your, your paper

that you that you're talking about.

414

00:33:57,501 --> 00:33:59,923

Do children have Bayesian intuitions?

415

00:33:59,923 --> 00:34:03,666

Because first, I really love the

experiment.

416

00:34:04,727 --> 00:34:10,531

I found that super, super interesting to

watch that.

417

00:34:10,772 --> 00:34:13,093

And also, yeah, as you were saying,

418

00:34:15,198 --> 00:34:24,305

in a way, the conclusion that we can draw

from that and basically how this could be

419

00:34:24,305 --> 00:34:31,751

integrated into how statistics education

is done, I think is extremely important.

420

00:34:32,132 --> 00:34:34,594

And actually, yeah, I wanted to ask you

about that.

421

00:34:34,594 --> 00:34:41,499

Basically, if you, what would be the main

thing you would change in the way

422

00:34:42,320 --> 00:34:44,341

statistical education is done?

423

00:34:45,562 --> 00:34:49,786

Well, so you're mainly based in Germany,

so I would ask in Germany, maybe just in

424

00:34:49,786 --> 00:34:56,190

general in Europe, since our countries are

pretty close on a lot of metrics.

425

00:34:56,190 --> 00:34:59,953

So I guess what you're saying for Germany

could also be applied for a lot of other

426

00:34:59,953 --> 00:35:01,153

European countries.

427

00:35:03,083 --> 00:35:05,204

it's actually starting to change.

428

00:35:05,425 --> 00:35:12,050

So some of my former post-docs are now

professors, and some are in education.

429

00:35:12,631 --> 00:35:20,457

And for instance, they have done

experiments in schools in Bavaria, where

430

00:35:20,457 --> 00:35:28,043

the textbooks have, in the 11th class,

have base rule.

431

00:35:28,684 --> 00:35:32,079

And they show trees, but with relative

frequencies.

432

00:35:32,079 --> 00:35:33,880

not natural frequencies.

433

00:35:35,041 --> 00:35:41,027

And I've run a study which basically

showed that when pupils learn in these

434

00:35:41,027 --> 00:35:46,172

textbooks base rules with relative

frequencies or conditional probabilities,

435

00:35:47,253 --> 00:35:49,114

and you test them later,

436

00:35:52,127 --> 00:35:56,128

90% can't do it anymore.

437

00:35:56,829 --> 00:35:58,950

They've done something like rote learning.

438

00:35:59,550 --> 00:36:00,890

Never understood it.

439

00:36:01,771 --> 00:36:09,855

And then, in class, teachers taught the

students natural frequencies they had

440

00:36:09,855 --> 00:36:11,575

never learned before.

441

00:36:12,456 --> 00:36:16,497

And then 90% could do it.

442

00:36:17,578 --> 00:36:19,358

Something they had never heard of.

443

00:36:19,918 --> 00:36:20,806

Thanks for watching!

444

00:36:21,296 --> 00:36:27,682

so my former students convinced the

Bavarian government with this study.

445

00:36:28,684 --> 00:36:37,133

And now natural frequencies and thus

understandable base is part of the mass

446

00:36:37,133 --> 00:36:38,994

curriculum in Bavaria.

447

00:36:42,351 --> 00:36:53,237

So that's a very concrete example where

one can help young persons to understand.

448

00:36:53,337 --> 00:36:59,381

And when they will be older and will be

doctors or have another profession where

449

00:36:59,381 --> 00:37:09,126

they need base, they will not be so

blocked and have to muddle through and not

450

00:37:09,126 --> 00:37:10,066

understand.

451

00:37:12,659 --> 00:37:20,228

And if there are patients, then they know

what to ask and how to find out what a

452

00:37:20,228 --> 00:37:25,976

positive HIV screening test really means

or a positive COVID test and what

453

00:37:25,976 --> 00:37:27,877

information one needs for that.

454

00:37:32,123 --> 00:37:42,310

So I think that statistical literacy is

one of the most important topics that

455

00:37:42,310 --> 00:37:44,150

should be taught in school.

456

00:37:47,403 --> 00:37:54,987

We still have an emphasis on the

mathematics on certainty, of certainty.

457

00:37:54,987 --> 00:37:59,809

So algebra, geometry, trigonometry,

beautiful systems.

458

00:38:00,470 --> 00:38:08,534

But what's most important for everyone in

later life is not geometry, it's

459

00:38:08,534 --> 00:38:10,174

statistical thinking.

460

00:38:11,859 --> 00:38:15,747

I mean in practical life.

461

00:38:15,768 --> 00:38:17,531

And we are missing to do that.

462

00:38:17,693 --> 00:38:19,937

The result is that...

463

00:38:22,563 --> 00:38:29,730

If you test people, including medical

professionals, or we have tested

464

00:38:30,212 --> 00:38:40,522

professional lawyers, with problems that

require Bayesian thinking, most are lost.

465

00:38:43,995 --> 00:38:47,186

And the level of statistical thinking

is...

466

00:38:50,903 --> 00:38:54,746

is often so low that you really can't

imagine it.

467

00:38:54,746 --> 00:38:56,107

Here's an example.

468

00:38:57,129 --> 00:39:03,675

Two years ago, the Royal Statistical

Society of London asked members of

469

00:39:03,675 --> 00:39:08,700

parliament whether they would be willing

to do a simple statistical test.

470

00:39:09,621 --> 00:39:11,382

And about 100 agreed.

471

00:39:14,059 --> 00:39:25,108

The first question was, if you throw a

fair coin twice, what's the chance that it

472

00:39:25,108 --> 00:39:28,530

will land twice on head?

473

00:39:29,952 --> 00:39:36,538

Now, if you think that every member of

parliament understands that there are four

474

00:39:36,538 --> 00:39:41,381

possibilities and two heads or two...

475

00:39:44,211 --> 00:39:47,334

So two heads are, that's one in fourth?

476

00:39:47,334 --> 00:39:48,054

No.

477

00:39:48,495 --> 00:39:52,338

About half understood and the others not.

478

00:39:52,559 --> 00:39:56,522

And the most wrong guess was it's still a

half.

479

00:39:58,431 --> 00:40:05,082

It's just an illustration of the level of

statistical thinking in our society.

480

00:40:05,082 --> 00:40:10,950

And I don't think if we would test German

politicians, we would do much better.

481

00:40:14,679 --> 00:40:18,902

And that's a, you might say, yeah, who

cares about coins?

482

00:40:19,062 --> 00:40:24,106

But look, there was COVID with all these

probabilities.

483

00:40:24,466 --> 00:40:26,548

There is investment.

484

00:40:27,329 --> 00:40:29,150

There are taxes.

485

00:40:29,230 --> 00:40:32,433

There are tons of numbers that need to be

understood.

486

00:40:32,433 --> 00:40:37,817

And if you have politicians that don't

even understand the most basic things,

487

00:40:38,218 --> 00:40:39,698

what can we expect?

488

00:40:43,470 --> 00:40:45,431

No, for sure.

489

00:40:45,431 --> 00:40:46,172

I completely agree.

490

00:40:46,172 --> 00:40:52,917

And these are topics we already tackled in

these podcasts, especially in episode 50,

491

00:40:53,358 --> 00:40:58,062

where I had David Spiegelhalter here on

the podcast.

492

00:40:58,062 --> 00:41:08,011

And we talked about these topics of

communication of uncertainty and all these

493

00:41:08,011 --> 00:41:11,810

very interesting topics, especially

education and how

494

00:41:11,810 --> 00:41:14,671

how to include all that in the education.

495

00:41:14,671 --> 00:41:20,593

So that these are very interesting and

important topics and I encourage people to

496

00:41:21,234 --> 00:41:25,675

listen to that episode, number 50 with

David Spiegelhauter.

497

00:41:25,695 --> 00:41:28,236

I will put it in the show notes.

498

00:41:28,677 --> 00:41:29,817

Yeah.

499

00:41:30,655 --> 00:41:34,617

I may add here that David and I have been

working together for many years.

500

00:41:35,277 --> 00:41:40,419

And he has been conducting the Wynton

Center for Evidence Communication or Risk

501

00:41:40,419 --> 00:41:42,300

Communication in Cambridge.

502

00:41:42,820 --> 00:41:48,062

And I'm still directing the Harding Center

for Risk Literacy.

503

00:41:49,023 --> 00:41:55,225

And both centers were funded by the same

person, David Harding, a London Investment

504

00:41:55,225 --> 00:41:58,846

Banker, who had insight that there's a

problem.

505

00:41:59,839 --> 00:42:07,313

But the rest of philanthropists don't

really seem to realize that it would be

506

00:42:07,313 --> 00:42:10,058

important to fund these centers.

507

00:42:10,058 --> 00:42:13,022

The Wyndham Center is now closed down.

508

00:42:15,455 --> 00:42:16,835

which is a great pity.

509

00:42:18,436 --> 00:42:22,157

And yeah.

510

00:42:22,157 --> 00:42:24,538

So there's very little funding for.

511

00:42:24,618 --> 00:42:26,639

So there's funding for research.

512

00:42:26,639 --> 00:42:31,801

So when I do the studies like this,

children, there's lots of funding for

513

00:42:31,801 --> 00:42:32,182

that.

514

00:42:32,182 --> 00:42:40,245

But the moment you apply what you learn

into the real world to help the society,

515

00:42:40,725 --> 00:42:42,005

funding stops.

516

00:42:43,306 --> 00:42:44,346

Except for...

517

00:42:44,427 --> 00:42:46,622

Philanthropes like David Harding.

518

00:42:47,203 --> 00:42:49,495

Mm-hmm.

519

00:42:49,495 --> 00:42:51,785

Any idea why that would be the case?

520

00:42:52,767 --> 00:42:59,374

They are the research agencies they think

they have not realized the problem that

521

00:42:59,775 --> 00:43:03,158

science is more than having publications.

522

00:43:05,119 --> 00:43:12,680

but that much of the science that we have

is actually useful.

523

00:43:12,881 --> 00:43:22,063

That's being realized in, if it's about

engineering, and it's about patent, yes,

524

00:43:22,343 --> 00:43:29,625

but that there are similar positive tools

that help people like natural frequencies

525

00:43:29,785 --> 00:43:34,906

to understand their world, and that you

can teach them, and then you need a few.

526

00:43:34,931 --> 00:43:41,677

guys who just go out and teach doctors,

lawyers or school children.

527

00:43:42,778 --> 00:43:47,522

That is not really in the mind of

politicians.

528

00:43:51,466 --> 00:43:56,027

Yeah, which is, which clearly is a shame,

right?

529

00:43:56,027 --> 00:44:02,510

Because you can see how important

probabilistic thinking is in a lot of, in

530

00:44:02,510 --> 00:44:03,790

a lot of fields.

531

00:44:03,790 --> 00:44:07,492

And, and, and especially in politics,

right?

532

00:44:07,492 --> 00:44:10,493

Even electoral forecasting, which is

something I've done a lot.

533

00:44:11,314 --> 00:44:18,116

Probabilistic thinking is absolutely,

absolutely of utmost importance.

534

00:44:18,116 --> 00:44:21,330

And yet, it's not there yet.

535

00:44:21,330 --> 00:44:29,317

and not a lot of interest in developing

this, at least in France, which is where I

536

00:44:29,317 --> 00:44:31,519

have done these experiments.

537

00:44:32,520 --> 00:44:35,582

That's always been puzzling to me,

actually.

538

00:44:36,524 --> 00:44:44,250

And even in sports, one of the recent

episodes I've done about soccer analytics

539

00:44:44,711 --> 00:44:47,202

with Maximilian Goebel, well,

540

00:44:47,202 --> 00:44:52,003

That was also an interesting conversation

about the fact that basically the methods

541

00:44:52,003 --> 00:44:57,706

are there to use the data more

efficiently, but a lot of European

542

00:44:57,706 --> 00:45:05,669

football clubs don't really use them for

some reason, which for me is still a

543

00:45:05,669 --> 00:45:13,953

mystery because that would help them make

better use of their finite resources and

544

00:45:13,953 --> 00:45:15,453

also be more competitive.

545

00:45:15,453 --> 00:45:16,033

So.

546

00:45:16,586 --> 00:45:21,790

Yeah, that's definitely something I'm

passionate to understand.

547

00:45:22,331 --> 00:45:25,714

So yeah, thanks a lot for doing all that

work.

548

00:45:25,795 --> 00:45:28,637

I'm here to try and help us understand all

that.

549

00:45:28,709 --> 00:45:30,970

everyone can help here.

550

00:45:31,411 --> 00:45:38,557

And for instance, most people are with the

doctors at some point, like COVID-19 or

551

00:45:38,717 --> 00:45:42,040

HIV tests or cancer screening.

552

00:45:42,441 --> 00:45:48,606

And everyone could ask the doctor, what's

the probability that I actually have the

553

00:45:48,606 --> 00:45:49,486

disease?

554

00:45:51,271 --> 00:45:54,273

or the virus, if it is positive.

555

00:45:56,051 --> 00:46:00,313

And then you likely will learn that your

doctor doesn't know that.

556

00:46:01,614 --> 00:46:02,854

Or excuse.

557

00:46:02,854 --> 00:46:06,616

Then you can help your doctor understand

that.

558

00:46:07,016 --> 00:46:11,378

And bring a natural frequency tree and

show them.

559

00:46:17,071 --> 00:46:23,074

I've done this with many doctors, but

quite a few.

560

00:46:23,074 --> 00:46:26,296

Over here, I said, I'm training doctors.

561

00:46:27,697 --> 00:46:32,600

I've trained more than 1,000, my own

researcher from the Harding Center, I've

562

00:46:32,600 --> 00:46:35,401

trained more than 5,000 extra.

563

00:46:36,282 --> 00:46:43,626

And the last time I was with my home

physician, I spent maybe 50 minutes with

564

00:46:43,626 --> 00:46:44,226

him.

565

00:46:44,719 --> 00:46:47,980

and 40 minutes explaining him on the

internet where he finds reliable

566

00:46:47,980 --> 00:46:49,020

information.

567

00:46:49,541 --> 00:46:54,343

The problem is not in the doctor's mind,

the problem is in the education, at the

568

00:46:54,343 --> 00:47:01,146

medical departments, where doctors learn

lots of things, but one thing they do not

569

00:47:01,146 --> 00:47:03,826

learn, statistical thinking.

570

00:47:04,362 --> 00:47:05,082

Mm-hmm.

571

00:47:05,305 --> 00:47:05,925

Yeah.

572

00:47:06,079 --> 00:47:08,206

with very few exceptions.

573

00:47:11,218 --> 00:47:16,922

And I'm curious, did you do some follow-up

studies on some courts of those doctors

574

00:47:16,922 --> 00:47:25,129

where you basically taught them those

tools, it seemed to work in the moment

575

00:47:25,129 --> 00:47:33,155

when they applied it, and then I'm curious

basically of the retention rate of these

576

00:47:33,155 --> 00:47:38,139

methods, basically is it something like,

oh yeah, when you force them in a way to

577

00:47:38,139 --> 00:47:41,301

use them, yeah, they see it's useful,

that's good.

578

00:47:41,779 --> 00:47:45,026

But then when you go away, they just don't

use them anymore.

579

00:47:45,026 --> 00:47:48,453

And they just refer to the previous way

they were doing things, which is of

580

00:47:48,453 --> 00:47:50,076

course, suboptimal.

581

00:47:50,076 --> 00:47:52,571

So yeah, I'm curious how that...

582

00:47:52,571 --> 00:47:57,595

continuing medley education, I have about

90 minutes and I teach them many things,

583

00:47:57,595 --> 00:47:59,556

not just natural frequencies.

584

00:48:00,077 --> 00:48:04,761

And when I teach them natural frequencies,

somewhere in the beginning, and I test

585

00:48:04,761 --> 00:48:07,022

them towards the end.

586

00:48:07,143 --> 00:48:11,746

So that's, yeah, a short time, a little

bit more than an hour.

587

00:48:13,108 --> 00:48:17,150

There is no way for me to find these

doctors again.

588

00:48:19,507 --> 00:48:26,692

But we have done follow-up studies up to

three months with students and teaching

589

00:48:26,692 --> 00:48:32,216

them how to translate conditional

probabilities in natural frequencies.

590

00:48:32,656 --> 00:48:40,562

And the interesting thing is that the

performance, which is after the training,

591

00:48:40,562 --> 00:48:46,225

around 90%, that means 90% of all tasks,

they get exactly right.

592

00:48:48,163 --> 00:48:51,864

After several months it stays at the same

level.

593

00:48:52,304 --> 00:48:59,428

Whereas in the control group where they

are taught conditional probability,

594

00:48:59,428 --> 00:49:02,509

exactly your problem is there.

595

00:49:02,629 --> 00:49:10,413

So they learn it not as well as natural

frequencies, but then a few days later it

596

00:49:10,413 --> 00:49:14,218

goes away and after three months they are

basically down with the story.

597

00:49:14,218 --> 00:49:14,839

Yeah.

598

00:49:16,339 --> 00:49:20,181

Some representations do not stick in the

minds.

599

00:49:20,762 --> 00:49:27,906

And frequency representations do, if they

are not relative frequencies.

600

00:49:34,198 --> 00:49:35,758

Yeah, this is definitely super

interesting.

601

00:49:35,758 --> 00:49:43,803

So basically to make it stick more, the

idea would be definitely use more natural

602

00:49:43,803 --> 00:49:44,564

frequencies.

603

00:49:44,564 --> 00:49:47,665

Is that what you were saying?

604

00:49:48,067 --> 00:49:55,194

Yes, and of course it doesn't hurt if you

continue thinking this way and do some

605

00:49:55,194 --> 00:49:56,234

exercise.

606

00:49:57,518 --> 00:49:59,619

Hmm, yeah.

607

00:49:59,619 --> 00:50:01,780

Yeah, yeah.

608

00:50:01,780 --> 00:50:02,601

I see.

609

00:50:02,601 --> 00:50:11,947

And something I'm also curious about and

that a lot of, a lot of beginners ask me a

610

00:50:11,947 --> 00:50:14,569

lot is what about priors, right?

611

00:50:14,929 --> 00:50:23,675

So I'm curious in your job, how did you

handle priors and the challenges regarding

612

00:50:23,675 --> 00:50:26,497

confirmation bias, persistence of...

613

00:50:27,062 --> 00:50:29,263

persistence of incorrect beliefs.

614

00:50:29,343 --> 00:50:37,030

So in a more general way, what I'm asking

is, how can individuals, particularly

615

00:50:37,030 --> 00:50:43,095

decision makers in fields like law or

medicine that you know very well, avoid

616

00:50:43,095 --> 00:50:50,961

the pitfalls associated with biased prior

beliefs and harnessing the power of

617

00:50:50,961 --> 00:50:52,061

patient reasoning?

618

00:50:52,787 --> 00:50:59,010

Yeah, so in the medical domain,

particularly in diagnostics, the priors

619

00:50:59,010 --> 00:51:07,995

are usually from, they're usually

frequencies and they are estimated by

620

00:51:07,995 --> 00:51:11,097

studies.

621

00:51:11,097 --> 00:51:17,820

There's always the possibility that a

doctor might adjust the frequency base

622

00:51:17,820 --> 00:51:22,402

rate a bit because he or she has some kind

of belief that

623

00:51:22,795 --> 00:51:25,757

this patient's main op-e exactly from that

group.

624

00:51:26,339 --> 00:51:29,902

But again, there's huge uncertainty about

priors.

625

00:51:31,611 --> 00:51:37,610

And also, one should not forget, there's

also uncertainty about likelihoods.

626

00:51:39,459 --> 00:51:43,646

Often in Beijing, the discussion centers

among priors.

627

00:51:45,772 --> 00:51:47,554

How do you know the likelihoods?

628

00:51:49,227 --> 00:51:57,089

So for instance, the, take the mammography

problem again, the probability that you

629

00:51:57,089 --> 00:52:04,751

test positive if you don't have cancer, so

which I in the example gave is 9%, which

630

00:52:04,751 --> 00:52:07,932

is roughly correct, but it varies.

631

00:52:07,932 --> 00:52:10,952

It depends on the age of the woman.

632

00:52:12,213 --> 00:52:16,034

It depends on quite a number of factors.

633

00:52:16,294 --> 00:52:19,434

And one should not forget that

634

00:52:19,503 --> 00:52:26,565

Also the likelihoods have to have some

kind of subjective element and judgment.

635

00:52:28,927 --> 00:52:36,090

And then there's a third more general

assumption, namely the assumption that all

636

00:52:36,090 --> 00:52:41,612

these terms, the likelihoods and the base

rates, which are from somewhere, maybe a

637

00:52:41,612 --> 00:52:48,274

study in Boston, would actually apply to a

study in Berlin.

638

00:52:49,123 --> 00:52:49,749

Mm-hmm.

639

00:52:51,455 --> 00:52:54,936

And I can name you a few more assumptions.

640

00:52:55,357 --> 00:53:00,259

For instance, that the world would be

stable, that nothing has happened.

641

00:53:00,359 --> 00:53:08,522

There's no different kind of cancer that

has different statistics.

642

00:53:09,043 --> 00:53:14,345

So one always has to assume a stable world

to do base.

643

00:53:14,905 --> 00:53:18,786

And one should be aware that it might not

be.

644

00:53:23,199 --> 00:53:26,946

And that's why I use the term statistical

thinking.

645

00:53:27,068 --> 00:53:31,999

Because you need to think about the

assumptions all the time and about the

646

00:53:31,999 --> 00:53:33,782

uncertainty in the assumptions.

647

00:53:35,571 --> 00:53:40,555

And also realize that often, particularly

if you have more complex problems, not

648

00:53:40,555 --> 00:53:51,984

just one test, but many, and many other

variables, you might, in these situations,

649

00:53:52,084 --> 00:53:55,306

where Bayes slowly gets intractable.

650

00:53:55,971 --> 00:53:56,618

Mm-hmm.

651

00:53:57,695 --> 00:54:04,040

You might think using a different

representation, like what we call a fast

652

00:54:04,040 --> 00:54:07,963

and frugal tree, that's a simple way.

653

00:54:07,963 --> 00:54:12,927

It's just like think about a natural

frequency tree, but it is an incomplete

654

00:54:12,927 --> 00:54:18,812

one, where you basically focus on the

important parts of the information and

655

00:54:18,812 --> 00:54:24,837

don't even try to estimate the rest in

order to avoid estimation error.

656

00:54:24,837 --> 00:54:27,638

And that's the key logic of heuristics.

657

00:54:29,031 --> 00:54:32,232

Under uncertainty, the big danger is that

you overfit.

658

00:54:32,973 --> 00:54:34,534

You overfit the data.

659

00:54:34,534 --> 00:54:39,117

You have wrongly assuming that the future

is like the past.

660

00:54:39,998 --> 00:54:47,143

And in order to avoid overfitting, as the

bias-variance dilemma shows in more

661

00:54:47,143 --> 00:54:53,307

detail, one needs to make things more

simple.

662

00:54:53,728 --> 00:54:57,410

Maybe not too simple, but more simple.

663

00:54:58,171 --> 00:55:04,104

and trying to estimate all conditional

probabilities may give you a great fit,

664

00:55:04,104 --> 00:55:05,826

but not good predictions.

665

00:55:11,626 --> 00:55:17,567

Yeah, so thanks a lot for this perfect

segue to my next question, because this is

666

00:55:17,567 --> 00:55:22,648

a recurring theme in your work and in your

research, simplicity.

667

00:55:23,249 --> 00:55:27,490

You often emphasize simplicity in

decision-making strategies.

668

00:55:28,130 --> 00:55:35,072

And so that was something I was wondering

about, because, well, I, of course, love

669

00:55:35,072 --> 00:55:36,232

Bayesian methods.

670

00:55:36,772 --> 00:55:38,333

They are extremely powerful.

671

00:55:39,193 --> 00:55:41,093

They are, most of the time,

672

00:55:41,330 --> 00:55:47,956

really intuitive to interpret, especially

the model parameters.

673

00:55:48,276 --> 00:55:53,301

But they are complex sometimes.

674

00:55:53,301 --> 00:55:58,806

And they appear even more complex than

they are to people who are unfamiliar with

675

00:55:58,806 --> 00:56:01,789

them, precisely because they are

unfamiliar with them.

676

00:56:01,789 --> 00:56:05,472

So anything you're unfamiliar with seems

extremely complex.

677

00:56:06,153 --> 00:56:06,793

So

678

00:56:07,346 --> 00:56:11,889

I'm wondering how we can bridge the gap

between the complexity of patient

679

00:56:11,889 --> 00:56:20,034

statistics, whether real or fantasized,

and the need for simplicity in practical

680

00:56:20,034 --> 00:56:25,258

decision-making tools, as you were talking

about, especially for professionals and

681

00:56:25,258 --> 00:56:30,461

the general public, because these are the

audiences we're talking about here.

682

00:56:31,391 --> 00:56:32,811

Now there are two ways.

683

00:56:33,012 --> 00:56:38,176

One is you stay within the Bayesian

framework and for instance avoid

684

00:56:38,176 --> 00:56:40,698

estimating conditional probabilities.

685

00:56:41,379 --> 00:56:44,461

And that would be what's called naive

Bayes.

686

00:56:45,022 --> 00:56:47,624

And naive Bayes can be amazingly good.

687

00:56:47,624 --> 00:56:55,130

It has also the advantage that is much

more easy to understand than regular

688

00:56:55,130 --> 00:56:55,970

Bayes.

689

00:56:56,871 --> 00:57:01,554

The second option is to leave the Bayesian

framework.

690

00:57:02,583 --> 00:57:14,826

and study how adaptive heuristics can give

you what base makes too complicated.

691

00:57:16,166 --> 00:57:18,987

And also there's too much overfitting.

692

00:57:19,527 --> 00:57:27,249

For instance, if we have studied

investment problems, so assume you have a

693

00:57:27,249 --> 00:57:31,650

sum of money and want to invest it in N

assets.

694

00:57:32,299 --> 00:57:33,439

How do you do it?

695

00:57:33,859 --> 00:57:40,142

And there are basic methods that tell you

how to weigh your money in each of these

696

00:57:40,142 --> 00:57:41,342

in assets.

697

00:57:41,602 --> 00:57:48,565

There is Markowitz Nobel Prize winning

method that's standards of statistics, the

698

00:57:48,625 --> 00:57:53,466

mean variance portfolio that tells you how

you should do that.

699

00:57:55,291 --> 00:58:02,918

But when Harry Markowitz made his own

investments for the time after his

700

00:58:02,918 --> 00:58:03,998

retirement...

701

00:58:05,887 --> 00:58:09,988

You might think he used his Nobel Prize

winning optimization method.

702

00:58:09,988 --> 00:58:11,309

No, he didn't.

703

00:58:11,629 --> 00:58:18,872

He used a simple heuristic that's called 1

over n, or divide equally, the same as a

704

00:58:18,872 --> 00:58:21,513

Bayesian equal prior.

705

00:58:22,974 --> 00:58:33,198

And a number of studies have asked how

good is 1 over n compared to the Nobel

706

00:58:33,198 --> 00:58:33,998

Prize?

707

00:58:34,956 --> 00:58:42,058

Winning Markowitz model and also modern

variants including Bayesian methods.

708

00:58:43,903 --> 00:58:54,110

The short answer is that 1 over n is

mostly as good as Markowitz and also

709

00:58:54,110 --> 00:59:00,314

better, and also the most modern

sophisticated models that use any kind of

710

00:59:00,314 --> 00:59:05,358

complexity cannot really beat it.

711

00:59:05,598 --> 00:59:08,220

The more interesting question is the

following.

712

00:59:08,220 --> 00:59:12,162

Can we identify in what situation

713

00:59:12,699 --> 00:59:18,804

A heuristic like 1 over n or any other of

the complicated models is ecologically

714

00:59:18,804 --> 00:59:20,566

rational.

715

00:59:20,566 --> 00:59:23,568

Because before we have talked about

averages.

716

00:59:24,169 --> 00:59:31,575

And you can see, so 1 over n has no free

parameter, very different from base.

717

00:59:31,575 --> 00:59:37,561

That means nothing needs to be estimated

from data.

718

00:59:37,561 --> 00:59:40,262

It actually doesn't need any data.

719

00:59:42,883 --> 00:59:50,625

Thus, in the statistical terms of bias and

variance, it may have a bias, and likely

720

00:59:50,625 --> 00:59:51,645

it has.

721

00:59:51,805 --> 00:59:58,507

So bias is the difference from the average

investment to the true situation, but it

722

00:59:58,507 --> 01:00:04,909

has no variance because it doesn't

estimate any parameters from data.

723

01:00:04,909 --> 01:00:10,150

And variance means it's the deviation.

724

01:00:10,391 --> 01:00:14,894

of individual estimates from different

samples around the average estimate.

725

01:00:14,934 --> 01:00:18,457

And since there is no estimate, there is

no variance.

726

01:00:18,717 --> 01:00:27,024

So Markowitz or Bayesian models, they

suffer from both errors.

727

01:00:27,825 --> 01:00:39,294

And the real question is whether the sum

of bias and variance of one method is

728

01:00:39,294 --> 01:00:40,147

larger than

729

01:00:40,147 --> 01:00:41,367

of the other one.

730

01:00:41,887 --> 01:00:48,650

And then ecologically rational it means,

let me illustrate this with the, with

731

01:00:48,650 --> 01:00:51,491

Markowitz versus Van der Weyne.

732

01:00:52,992 --> 01:01:00,395

So if you have more, if n is larger, then

you have more parameters to estimate

733

01:01:00,395 --> 01:01:04,076

because the covariances, they just

increase.

734

01:01:04,877 --> 01:01:06,798

That means more measurement error.

735

01:01:07,498 --> 01:01:08,418

So you can...

736

01:01:09,375 --> 01:01:17,297

derived from that, that in situations

where we have a large number of assets,

737

01:01:18,197 --> 01:01:23,579

then the complex methods will likely not

be as good.

738

01:01:24,999 --> 01:01:31,041

While 1 over n doesn't have more

estimation error, it has none anyhow.

739

01:01:32,001 --> 01:01:36,322

And then another thing is, if the true

distribution of

740

01:01:36,599 --> 01:01:42,903

the so-called optimal weights that you

only can know in the future, is highly

741

01:01:42,903 --> 01:01:43,923

skewed.

742

01:01:43,923 --> 01:01:48,206

Then 1 over n is not a good model for

that.

743

01:01:48,266 --> 01:01:52,129

But it's roughly equal, then that's the

case.

744

01:01:52,529 --> 01:01:57,773

So these are, and then sample size plays a

role for the estimation.

745

01:01:57,813 --> 01:02:05,298

So the more data you have, the Bayesian or

Markowitz model will profit, while it

746

01:02:05,298 --> 01:02:06,398

doesn't matter.

747

01:02:06,839 --> 01:02:12,903

for the 1 over n heuristic because it

doesn't even look at the data.

748

01:02:12,903 --> 01:02:16,286

So that's the kind of ecological

rationality thinking.

749

01:02:16,366 --> 01:02:21,250

And there are some estimates just to give

you some flesh into that.

750

01:02:22,071 --> 01:02:29,197

One study has asked, one study that found

that mostly in seven out of eight, I

751

01:02:29,197 --> 01:02:36,382

think, tests 1 over n made more money in

terms of Sharpe ratio and similar.

752

01:02:36,407 --> 01:02:45,250

criteria than the optimal Markowitz

portfolio and with 10 years of data.

753

01:02:45,250 --> 01:02:50,252

So they asked the question how many years

of data would one need so that the

754

01:02:50,252 --> 01:02:57,856

estimates get precise so that eventually

the complex model outperforms the simple

755

01:02:57,856 --> 01:02:58,876

heuristic.

756

01:02:59,837 --> 01:03:04,795

And that depends on the number of assets

you have.

757

01:03:04,795 --> 01:03:10,362

And if they are 50, for instance, then the

estimate is you need 500 years of stock

758

01:03:10,362 --> 01:03:11,223

data.

759

01:03:12,024 --> 01:03:20,355

So in the year 2500, we can turn to the

complex models, provided the same stocks

760

01:03:20,355 --> 01:03:23,178

are still around in the stock market in

the first place.

761

01:03:26,155 --> 01:03:29,177

That's a very different way to think about

a situation.

762

01:03:29,438 --> 01:03:36,206

It's the Herbert Simonian way, or don't

think about a method by itself, and don't

763

01:03:36,206 --> 01:03:40,851

ever believe that a method is rational in

every situation.

764

01:03:41,112 --> 01:03:47,119

But think about how this method matches

with the structure of environment.

765

01:03:48,959 --> 01:03:54,219

And that's a much more difficult question

to answer than just claiming that

766

01:03:54,219 --> 01:03:55,562

something is optimal.

767

01:04:01,706 --> 01:04:03,346

Yeah, I see.

768

01:04:04,668 --> 01:04:06,689

That's interesting.

769

01:04:07,730 --> 01:04:10,752

I love the very practical aspect of that.

770

01:04:12,473 --> 01:04:20,659

And also that, I mean, in a way that focus

on simplicity is something I found also

771

01:04:20,659 --> 01:04:26,103

very important in the way of basically

thinking about parsimony.

772

01:04:26,604 --> 01:04:29,525

Why make something more difficult when you

don't have to?

773

01:04:30,014 --> 01:04:39,102

And it's something that I always use also

in my teaching, where I teach how to build

774

01:04:39,102 --> 01:04:40,062

a model.

775

01:04:41,163 --> 01:04:48,570

Don't start with the hierarchical time

series model, but start with a really

776

01:04:48,570 --> 01:04:52,633

simple linear regression, which is just

one predictor, maybe.

777

01:04:53,074 --> 01:04:57,977

And don't make it hierarchical yet, even

though that makes sense.

778

01:04:58,094 --> 01:05:03,735

the problem at hand because from a very

practical standpoint if the model fails

779

01:05:03,735 --> 01:05:10,237

and it will at first if it's too complex

you will not know which part to take apart

780

01:05:10,237 --> 01:05:16,919

right and to and to make better so it's

just the parsimony makes it way easier to

781

01:05:16,919 --> 01:05:21,040

build the model and also to choose the

prior right just don't make your priors

782

01:05:21,040 --> 01:05:25,901

turn complicated find good enough priors

because you won't find

783

01:05:28,130 --> 01:05:30,668

Find good enough priors and then go with

that.

784

01:05:33,527 --> 01:05:39,490

I mean, the often use of the term optimal

is mostly misleading.

785

01:05:40,851 --> 01:05:47,616

Under uncertainty or interactability, you

cannot find the optimal solution and prove

786

01:05:47,616 --> 01:05:49,157

it.

787

01:05:49,157 --> 01:05:50,458

It's an illusion.

788

01:05:51,999 --> 01:05:58,223

And under uncertainty, so when you have to

make predictions, for instance, about the

789

01:05:58,223 --> 01:06:01,545

future and you don't know whether the

future is like the past,

790

01:06:03,635 --> 01:06:09,162

quite simple heuristics outperform highly

complex methods.

791

01:06:09,443 --> 01:06:17,195

An example is, remember when Google

engineers try to predict the flu with a

792

01:06:17,195 --> 01:06:19,618

system that's called Google Flu Trends.

793

01:06:21,819 --> 01:06:29,266

and it was a secret system and it started

with 45 variables, they were also secret,

794

01:06:29,266 --> 01:06:31,127

and the algorithm was secret.

795

01:06:31,768 --> 01:06:37,533

And it ran from 2008 till 2015.

796

01:06:38,815 --> 01:06:43,879

And at the very beginning in 2009 the

swine flu occurred.

797

01:06:44,680 --> 01:06:47,742

And out of season in the summer.

798

01:06:48,827 --> 01:06:53,749

And Google flew trends, so the big data

algorithm had learned that the flu is high

799

01:06:53,749 --> 01:06:55,790

in the winter and low in the summer.

800

01:06:56,051 --> 01:07:09,298

So it underestimated the flu-related

doctor visits, which was the criterion.

801

01:07:09,658 --> 01:07:18,222

And the Google engineers then tried to

revise the algorithm to make it better.

802

01:07:19,315 --> 01:07:21,395

And here are two choices.

803

01:07:21,515 --> 01:07:27,418

One is what I call the complexity

illusion, namely you have a complex

804

01:07:27,418 --> 01:07:34,381

algorithm and the high uncertainty, like

the flu is a virus that mutates very

805

01:07:34,381 --> 01:07:37,742

quickly, and it doesn't work.

806

01:07:37,742 --> 01:07:38,703

What do you do now?

807

01:07:38,703 --> 01:07:40,403

You make it more complex.

808

01:07:40,503 --> 01:07:43,084

And that's what the Google engineers did.

809

01:07:43,184 --> 01:07:48,726

So they used a revision with about 160

variables, also secret.

810

01:07:49,775 --> 01:07:54,426

and thought they would solve the problem,

but it didn't improve at all.

811

01:07:54,969 --> 01:07:57,434

The opposite reaction would have been...

812

01:07:59,283 --> 01:08:03,224

You have a complex and high uncertain

problem.

813

01:08:03,285 --> 01:08:05,446

You have a complex algorithm.

814

01:08:05,466 --> 01:08:06,306

It doesn't work.

815

01:08:06,306 --> 01:08:07,467

What do you do now?

816

01:08:07,467 --> 01:08:08,948

You make it simpler.

817

01:08:10,069 --> 01:08:13,590

Because you have too much estimation

error.

818

01:08:13,590 --> 01:08:15,711

The future isn't like the past.

819

01:08:16,412 --> 01:08:25,577

We have tested those published paper on a

very simple heuristic that just takes one

820

01:08:25,577 --> 01:08:26,717

data point.

821

01:08:27,218 --> 01:08:28,255

So remember that.

822

01:08:28,255 --> 01:08:37,037

Google Flu Trends estimated next week's or

this week's flu-related doctor visits.

823

01:08:38,037 --> 01:08:45,480

So the one data point algorithm is you

take the most recent data, it's usually

824

01:08:45,480 --> 01:08:52,542

one week or two weeks in the past, and

then make the simple prediction that's

825

01:08:52,542 --> 01:08:54,902

what it will be this or next week.

826

01:08:55,947 --> 01:09:00,829

That's a heuristic called the recency

heuristic, which is well documented in

827

01:09:00,829 --> 01:09:07,831

human thinking, is often mistaken as a

bias heuristic.

828

01:09:08,452 --> 01:09:14,634

And we showed it for the entire run of

Google Flu Trends for eight years.

829

01:09:15,315 --> 01:09:23,598

The simple heuristic outperformed Google

Flu Tense in all updates, about a total, I

830

01:09:23,598 --> 01:09:25,078

think, three updates.

831

01:09:26,003 --> 01:09:33,749

for every year and for each of the updates

and reduce the error by about half.

832

01:09:33,749 --> 01:09:36,051

You can intuitively see that.

833

01:09:36,832 --> 01:09:43,417

So a big data algorithm gets stuck like if

something unexpected happened like in the

834

01:09:43,417 --> 01:09:44,497

swine flu.

835

01:09:46,800 --> 01:09:55,326

The recency heuristic can quickly adapt to

the new situation and

836

01:09:57,591 --> 01:10:03,914

So that's another example showing that you

always should test a simple algorithm

837

01:10:03,914 --> 01:10:04,774

first.

838

01:10:05,995 --> 01:10:09,277

And you can learn from the human brain.

839

01:10:09,277 --> 01:10:16,881

So the heuristics we use are not what the

heuristics and bios people think, always

840

01:10:16,881 --> 01:10:18,062

second best.

841

01:10:18,082 --> 01:10:18,762

No.

842

01:10:19,183 --> 01:10:23,024

You need to see in a situation of high

uncertainty.

843

01:10:23,525 --> 01:10:25,366

Pick a right heuristic.

844

01:10:27,163 --> 01:10:32,490

A way to find it is to study what humans

do in these situations.

845

01:10:36,839 --> 01:10:39,533

I call this psychological AI.

846

01:10:42,374 --> 01:10:43,655

Yeah, I love that.

847

01:10:43,655 --> 01:10:50,079

Um, and actually that, so before closing

up the show that, um, sets us up nicely

848

01:10:50,079 --> 01:10:56,122

for one of my last questions, which is a

bit more, uh, formal thinking.

849

01:10:56,363 --> 01:11:02,326

Because so you, you've been talking about

AI and, and these decision-making science.

850

01:11:02,326 --> 01:11:07,929

So I'm wondering how you see the future of

decision science.

851

01:11:09,122 --> 01:11:14,665

And where do vision statistics fit into

this evolving landscape, especially

852

01:11:14,665 --> 01:11:20,188

considering the increasing availability of

data and computational power?

853

01:11:20,188 --> 01:11:24,049

And that may be related to your latest

book.

854

01:11:24,252 --> 01:11:24,914

Yeah.

855

01:11:28,123 --> 01:11:34,086

My latest book is about, it's called How

to Stay Smart in a Smart World, and it

856

01:11:34,086 --> 01:11:40,028

teaches one thing, a distinction between

stable worlds and unstable worlds.

857

01:11:40,208 --> 01:11:48,772

Stable worlds are like what the economist

Frank Knight called a situation of risk,

858

01:11:48,772 --> 01:11:51,993

where you can calculate the risk as

opposed to uncertainty.

859

01:11:51,993 --> 01:11:53,614

That's unstable worlds.

860

01:11:54,374 --> 01:11:55,915

If you have a stable world,

861

01:11:55,915 --> 01:12:01,496

That's the world of optimization

algorithms, at least if it's fractable.

862

01:12:02,516 --> 01:12:08,898

And here more data helps, because you can

fine-tune your parameters.

863

01:12:09,398 --> 01:12:14,240

If you have to deal with an unstable

world, and that's most of things are

864

01:12:14,240 --> 01:12:19,161

unstable, are not just viruses, but human

behavior.

865

01:12:19,161 --> 01:12:25,662

And complex algorithms typically do not

help in predicting human behavior.

866

01:12:26,291 --> 01:12:28,851

In my book I have a number of examples.

867

01:12:29,272 --> 01:12:36,615

And here you need to study smart adaptive

heuristics that help.

868

01:12:37,515 --> 01:12:50,801

And for instance, we are working with the

largest credit rating company in Germany.

869

01:12:51,641 --> 01:12:52,822

And they have...

870

01:12:55,099 --> 01:12:59,542

intransparent, secret, complex algorithms.

871

01:12:59,963 --> 01:13:06,247

That has caused an outcry in the public

because these are decisions that decide

872

01:13:06,368 --> 01:13:15,255

whether you are considered for, if you

want to rent a flat or not, and other

873

01:13:15,255 --> 01:13:16,035

things.

874

01:13:17,237 --> 01:13:24,902

And we have shown them that if they make

the algorithms simpler.

875

01:13:26,507 --> 01:13:29,668

then they actually get better and more

transparent.

876

01:13:29,869 --> 01:13:31,790

And that's an interesting combination.

877

01:13:31,790 --> 01:13:36,653

Here is one future about solving the

so-called XAI problem.

878

01:13:36,854 --> 01:13:45,059

First try a simple heuristic, that means a

simple algorithm, and see how good it is.

879

01:13:46,220 --> 01:13:52,664

And not just test competitively, a handful

of complex algorithms.

880

01:13:53,325 --> 01:13:55,979

Because the simple algorithm may be

881

01:13:55,979 --> 01:13:59,540

do as well or better than the complex

ones.

882

01:14:00,361 --> 01:14:02,662

And also they are transparent.

883

01:14:03,522 --> 01:14:09,085

And that means that doctors, for instance,

may accept an algorithm because they

884

01:14:09,085 --> 01:14:10,605

understand it.

885

01:14:11,106 --> 01:14:17,429

And a responsible doctor would not really

want to have a neural network diagnostic

886

01:14:17,429 --> 01:14:20,690

system that he or she doesn't understand.

887

01:14:23,219 --> 01:14:30,868

So the future of decision making would be,

if you want it in a few sentences, take

888

01:14:30,868 --> 01:14:33,070

uncertainty serious.

889

01:14:34,823 --> 01:14:39,368

and distinguish it from situations of

risk.

890

01:14:40,270 --> 01:14:43,333

We are not foreign, I hear this.

891

01:14:43,474 --> 01:14:50,102

And second, take heuristics seriously and

don't confuse them with viruses.

892

01:14:52,500 --> 01:14:53,492

And third...

893

01:14:55,335 --> 01:15:02,017

If you can, go out in the real world and

study decision making there.

894

01:15:02,017 --> 01:15:08,420

How firefighters like Gary Klein make

decisions, how chess masters make

895

01:15:08,420 --> 01:15:12,121

decisions, how scientists come up with

their theories.

896

01:15:13,162 --> 01:15:20,485

And you will find that standard decision

theory that's geared on small worlds of

897

01:15:20,485 --> 01:15:25,466

calculated risk will have little to tell

you about that.

898

01:15:26,203 --> 01:15:33,486

and then have the courage to study

empirically what experience people do, how

899

01:15:33,486 --> 01:15:39,429

to model this as heuristics and find out

their ecological rationality.

900

01:15:39,429 --> 01:15:43,390

That's what I see will be the future.

901

01:15:49,939 --> 01:15:50,119

Nice.

902

01:15:50,119 --> 01:15:58,646

Yeah, I find that super interesting in the

sense that it's also something I can see

903

01:15:59,147 --> 01:16:05,011

as an attractive feature of the patient

modeling framework from people coming to

904

01:16:05,011 --> 01:16:16,741

us for consulting or education, where the

fact that the models are clear on the

905

01:16:16,741 --> 01:16:17,682

assumptions.

906

01:16:17,682 --> 01:16:22,863

and the priors and the structure of the

model make them much more interpretable.

907

01:16:22,863 --> 01:16:29,405

And so way less black boxy than classic AI

models.

908

01:16:29,545 --> 01:16:33,846

And that's, yeah, definitely a trend we

see and it's also related to causal

909

01:16:33,846 --> 01:16:34,646

inference.

910

01:16:34,847 --> 01:16:40,748

People most of the time wanna know if X

influences Y and in what way, and if that

911

01:16:40,748 --> 01:16:42,809

is, you know, predictable way.

912

01:16:42,809 --> 01:16:45,489

And so for that causal inference,

913

01:16:45,838 --> 01:16:48,519

fits extremely well in the Bayesian

framework.

914

01:16:48,519 --> 01:16:53,961

So that's also something I'm really

curious about to see evolve in the coming

915

01:16:53,961 --> 01:16:59,423

years, especially with some new tools that

start to appear.

916

01:16:59,423 --> 01:17:07,707

Like I had Ben Vincent lately on the show

for episode 97, and we talked about causal

917

01:17:07,707 --> 01:17:12,529

pi and how to do causal inference in PyMC.

918

01:17:12,529 --> 01:17:15,209

And now we have the new do operator.

919

01:17:15,274 --> 01:17:18,276

in Pintsy, which helps you do that.

920

01:17:18,276 --> 01:17:27,864

So, yeah, I really love seeing all those

tools coming together to help people do

921

01:17:28,565 --> 01:17:33,869

more causal inference and also more state

of the art causal inference.

922

01:17:38,426 --> 01:17:48,011

And for the curious, we will do with

Benjamin Vincent a modeling webinar in the

923

01:17:48,011 --> 01:17:52,393

coming weeks, probably in September, where

he will demonstrate how to use the

924

01:17:52,393 --> 01:17:55,535

Dooperator in PIMC.

925

01:17:55,535 --> 01:17:58,636

So if you're curious about that, follow

the show.

926

01:17:58,797 --> 01:18:04,860

And if you are a patron of the show, you

will get early access to the recording.

927

01:18:04,860 --> 01:18:07,681

So if you want to support the show with...

928

01:18:08,002 --> 01:18:09,182

Cafe latte per month.

929

01:18:09,182 --> 01:18:19,190

Um, I, uh, I'm really, um, uh, thanking

you from the bottom of my heart.

930

01:18:19,190 --> 01:18:25,454

Um, well, Gert, um, I have so many other

questions, but I think, I think it's a

931

01:18:25,454 --> 01:18:27,416

good time to, to stop.

932

01:18:27,416 --> 01:18:31,839

Uh, I've already taken a lot of your time,

so I want to be mindful of that.

933

01:18:31,839 --> 01:18:35,821

Um, but before letting you go.

934

01:18:36,118 --> 01:18:39,241

I'm going to ask you the last two

questions I ask every guest at the end of

935

01:18:39,241 --> 01:18:40,282

the show.

936

01:18:40,903 --> 01:18:45,749

Number one, if you had unlimited time and

resources, which problem would you try to

937

01:18:45,749 --> 01:18:46,449

solve?

938

01:18:50,885 --> 01:18:55,490

I would try to solve the problem to

understanding the ecological rationality

939

01:18:55,490 --> 01:18:58,934

of strategies, particular heuristics.

940

01:19:00,898 --> 01:19:01,798

Hmm.

941

01:19:01,798 --> 01:19:03,118

That's a next.

942

01:19:04,319 --> 01:19:07,800

Yeah.

943

01:19:07,800 --> 01:19:09,320

You're the first one to answer that.

944

01:19:09,320 --> 01:19:12,882

And that's a very precise answer.

945

01:19:12,882 --> 01:19:14,742

I am absolutely impressed.

946

01:19:16,403 --> 01:19:21,844

And second question, if you could have

dinner with any great scientific mind,

947

01:19:21,885 --> 01:19:25,165

dead, alive, or fictional, who would it

be?

948

01:19:28,355 --> 01:19:33,819

Oh, I would love to have dinner with two

women.

949

01:19:34,500 --> 01:19:38,923

The first one is a pioneer of computers,

Ada Lovelace.

950

01:19:39,123 --> 01:19:44,788

And the second one is a woman of courage

and brain, Marie Curie.

951

01:19:45,529 --> 01:19:50,012

The only woman who got two Nobel Prizes.

952

01:19:51,093 --> 01:19:56,317

And Marie Curie said something very

interesting.

953

01:19:56,858 --> 01:19:58,218

Nothing in life.

954

01:19:58,395 --> 01:19:59,895

is to be feared.

955

01:20:00,056 --> 01:20:02,378

It is only to be understood.

956

01:20:02,939 --> 01:20:11,266

Now is the time to understand more so that

we may fear less." Kori said this when she

957

01:20:11,266 --> 01:20:16,890

discovered that she had cancer and was

soon to die.

958

01:20:21,378 --> 01:20:22,758

extremely inspiring.

959

01:20:23,079 --> 01:20:25,101

Yeah, thanks, Edgar.

960

01:20:25,181 --> 01:20:29,205

That's really inspiring.

961

01:20:29,407 --> 01:20:35,895

But having courage is something that's

very important for every researcher.

962

01:20:35,976 --> 01:20:44,027

And also having courage to look forward,

to dare, to find new avenues, rather than

963

01:20:44,228 --> 01:20:46,470

playing the game of the time.

964

01:20:50,090 --> 01:20:57,555

Well, on that note, I think, well, thank

you for coming on the show, Gert.

965

01:20:57,555 --> 01:21:00,236

That was an absolute pleasure.

966

01:21:00,357 --> 01:21:07,401

I'm really happy that we could have that

more, let's say epistemological discussion

967

01:21:07,962 --> 01:21:09,323

than we're used to on the podcast.

968

01:21:09,323 --> 01:21:11,285

I love doing that from time to time.

969

01:21:11,285 --> 01:21:17,049

Also filled with applications and

encourage people to take a look at the

970

01:21:17,049 --> 01:21:17,769

show notes.

971

01:21:17,769 --> 01:21:18,649

I put.

972

01:21:19,571 --> 01:21:24,401

your books over there, some of your

papers, a lot of resources for those who

973

01:21:24,401 --> 01:21:25,464

want to dig deeper.

974

01:21:25,464 --> 01:21:30,433

So thank you again, Gert, for taking the

time and being on this show.

975

01:21:32,653 --> 01:21:33,996

It was my pleasure.

976

01:21:34,681 --> 01:21:35,562

Bye bye.

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