The Drunkard's Walk Outline
Title: The Drunkard’s Walk: How Randomness Rules Our Lives
Author: Leonard Mlodinow
Length: 272 pages
Published: 2008
ISBN-10: 0375424040
ISBN-13: 978-0375424045
Chapter 1: Peering Through the Eyepiece of Randomness
Intuition is suboptimal in today’s world
Trying to find a pattern is often suboptimal
- accords with earlier writings that I have
Yelling -> regression toward mean provides perceived benefit
Randomness is “why successful people in every field are almost universally members of a certain set – the set of people who don’t give up.”
Executives are judged by their ability to pick hits
Discusses home runs as coin flips
Chapter 2: The Laws of Truths and Half-Truths
Bayes’ theorem as it applies to the truth of statements
Reversal of preferences or misapplication of probability principles
Greeks didn’t create systems for reasoning about chance because of their worldview and limits on arithmetic
Availability bias
Romans interested in probability based on their cultural practicality
Make sure the events are truly independent before multiplying probabilities
Talks about how DNA is modern form of half-truths due to errors in process
Chapter 3: Finding Your Way Through a Space of Possibilities
Sample sizes
Monty Hall problem
Cardano and expertise in gambling -> Book on Games of Chance
Chapter 4: Tracking the Pathways to Success
Galileo -> multiply outcomes by probability of each outcome for expected value
Pascal and points -> baseball team with 55% chance of winning would need to play 269 games to have statistical significance
Pascal’s triangle -> choose
Pascal’s wager
Lotteries
Chapter 5: The Dueling Laws of Large and Small Numbers
Benford’s Law
Roulette wheel shows that most things in physical world cannot be unbiased
Bernoulli -> asking how many trials we need to be relatively certain of something
Urns -> allow for sampling
Chapter 6: False Positives and Positive Fallacies
Discusses having a point out there and entities that describe the point imperfectly, and then how to use this information intelligently with Bayes’ theorem
“But if you are a new driver, should you be classified as low risk (a kid who obeys the speed limit and volunteers to be the designated driver) or high risk (a kid who races down Main Street swigging from a half-empty $2 bottle of Boone’s Farm apple wine)?”
Discusses prosecutor’s fallacy after talking about false positives
Chapter 7: Measurement and the Law of Errors
Discusses grades as not indicative of true value (I’ve noticed this in art grading in high school)
Averaging measurements to determine true result is something fundamental about physics experiments
Test scores, wine ratings are highly variable
Error law and normal distribution
Chapter 8: The Order in Chaos
Statistics can provide insights into the system from which the statistics are derived
Discusses fraud detection with statistics: college basketball, stock options, military draft
Law of large numbers
Chapter 9: Illusions of Patterns and Patterns of Illusion
Most people are bad at determining what has been produced by a random process because their brain naturally sees patterns
- I’ve long accepted this
The “hot hand” hypothesis is not correct because, empirically, past shots do not actually affect future shots
Cancer clusters will happen as a result of random mutations in a large population
Psychological reasons for these biases:
- people like to exercise control over their environment
- confirmation bias (instead of looking for contradictions, we seek to prove our point)
Keeps hammering that CEOs and other people in high positions of responsibility are often luckier than people attribute to them
- this forms a whole new model of looking at compensation, in my opinion
- the illusion of control is increased when there is strategizing prior to the events of chance
Chapter 10: The Drunkard’s Walk
Determinism in our lives doesn’t quite work because of the butterfly effect
Hindsight is 20/20, history seems made to happen, but everything is hard to predict
“It is easy to concoct stories explaining the past or to become confident about dubious scenarios for the future. That there are traps in such endeavors doesn’t mean we should not undertake them. But we can work to immunize ourselves against our errors of intuition. We can learn to view both explanations and prophecies with skepticism. We can focus on the ability to react to events rather than relying on the ability to predict them, on qualities like flexibility, confidence, courage, and perseverance. And we can place more importance on our direct impressions of people than on their well-trumpeted past accomplishments. In these ways, we can resist forming judgments in our automatic deterministic framework.”
“in complex systems (among which I count our lives) we should expect that minor factors that we can usually ignore will by chance sometimes cause major incidents.”
Even if several companies enter a market with the same strengths and weaknesses, one of them is likely to get more business because of chance alone. This positive run will then allow them to make more investments, which will magnify their gains and make them into a potential leader.
Many examples given of how ability does not necessarily translate into success
- this is hard for me to accept
“What I’ve learned, above all, is to keep marching forward because the best news is that since chance does play a role, one important in success is under our control: the number of at bats, the number of chances taken, the number of opportunities seized.”