The ludic fallacy could apply here as well. If you calculate that on average you will make a profit but in actuality this profit fluctuates so wildly that you will almost certainly go bankrupt in the process the ludic fallacy could apply.
Another criticism by Nassim Taleb to this field is the use of the normal distribution to distributions that are not normal at all. This could lead to the problem that I described in the previous paragraph.
Also the fact that many market players got bailed out by governments when things went south. They may have been aware that this would happen all along, which would mean the explicit market game and the real market game are 2 very different things with very different rules.
Yes and no - mostly the market is a game, like foxes and rabbits where the "rabbits" are forced into behaviours that the foxes can exploit. The dominant strategy for the rabbits is created by policy and regulation and also business success - all that money has to go somewhere. The foxes know that Mr. Rabbit will come back from the veg garden at 6pm and so wait at the hole. All is well as the rabbits grow in number, fatten and prosper, and so do the foxes. So in this situation its all games and you can get rich if you play well.
Good examples are carry trades and insurance market punts - people know that the central bank of Japan has to do X, they know that people are getting old in the developed world... betting on this happening is mostly a clever thing to do.
Every so often at random along comes an event that throws all this into the air - this might be something massive or something small but when it happens people go bust. For example, well look around.
There is a lot of talk that "oh we will know when we are in trouble and we will just change strategy" but sometimes that just proves not to be so. The point is that getting to play the game well for long enough to prosper is just luck, getting out at the right time is just luck. You can be stupid and get taken to the cleaners at any time, and you can play well and just be "the fat rabbit" at any time as well. So, be lucky and play well.
It's a fairly well-known trick where you play 2 strong players at the same time: You take the first player's move as white and play it yourself as white in the other game. So the two boards have the same position, with you playing different colours. That way you will have an even score in the 2 games. He did that with 4 pairs and the 9th was the head of the uni chess orgnisation, a weak player he beat easily.
Yes, I was just wondering if I was missing something about the kickboxing comparison, because presumably Tim Ferriss did actually fight more or less on his own merits?
I'm not sure what kind of championship that was but for an experienced fighter having a 30 pound "handicap" versus an inexperienced one should amount to no real life disadvantage. Don't underestimate what a 165 lbs person's tibia can do to a 195 lbs person's head on even thigh. There's no "hack" to not getting your lights knocked out with one punch/kick from a good fighter 30 lbs lighter than you. And tricking the weigh in is something that has been done since the second ever weigh-in.
The fact that he was able to hold off experienced fighters, even if they were below his weight class, means he was plenty qualified to be there despite his very modest self assessment.
[Edited from here] He seems to be an actual fighter under Dave Camarillo but the framing of this story, that he's just an average "stuff my face with peanut butter sandwiches, tricked the weigh-in" kind of guy, is just in order to sell his "life hacks" books.
All I can find is that 1999 was the second year for the championship which could mean not very strong competition. But there's no mention of him in any Wushu/Sanda/Sanshou championship. He also used to claim that he is a "Cage fighter in Japan, vanquisher of four world champions (MMA)" (since removed from his page). Being a 4 time world champion would have contradicted his "just a regular guy using life hacks" premise. Without an actual record of him winning that "Chinese Kickboxing National Championships 1999" I guess he's just peddling the same "tricks" from his book. One of them might be "just say you did it".
Thai kickboxing and BJJ isn’t a joke. Neither is physics and bone density increases through training, same with muscle fiber density and reaction time. I can go on. Training matters.
I've watched a Thai kickboxing match in Bangkok, and what amazed me, and I didn't expect is that the first few minutes are like dancing, no touching, then it slowly accelerates over say 30 minutes or something to a full out thing. If you can bend the rules in those first 5 minutes, even a sedate developer might stand a chance!
A dance is a pretty good metaphor for full contact sparring with a ref. Any other kind of fight, just don’t. Just get out of there. It’s not worth fighting over for long, if ever. The most OP fighting move is refusing to fight, opting not to strategically, and only fighting when absolutely necessary, like legally or morally necessary. Be like water. Support life and only crash when it’s time to rock and roll.
Yep definitely don’t fight if you can avoid it. This is why I am very forgiving when driving. Keep a distance from idiots, drive as safe as possible, don’t honk people etc. This way the fight is avoided. Not about being a wimp, but most fights aren’t worth it. And there are other ways to fight than literally. I have not been in a proper fight. Closest thing was at high school but nothing much happened. Other than that I’ve been coaxed into fighting in drunken places maybe 3 times but didn’t take the bait. It’s unlucky if you are in a situation where you are forced to fight. All of these times walking away is an option.
That's like saying that after you start an engine it's idling for a while and consuming very little, if you could just get you your destination while it's still idling you could save so much fuel.
You opponent will not wait for you to bend the rules a few times before they react unless the first bend knocks them out. Pushing people off the fighting surface might work once, maybe twice. If that's the only weapon in a fighter's arsenal I see a fractured skull in their immediate future. :)
I understand but what I meant by "once" was "exactly once", meaning the first round of the first fight in the championship. It's easy to spot a one trick pony because that's all they try. The second time the opponent would just overwhelm him with superior technique and physical force, we're talking about a national championship, there's no shortage of those. There's only so much pushing you can do when you're met with a kick to the head. And the weight advantage is meaningless once you realize weigh-in tricks have been used since forever, he'd just meet another guy who did the same.
No, the more I look at this the more I realize the story of the regular guy exploiting loopholes to win a championship is a good "how the little guy won" story but also a complete fabrication. It's only good for the circle-jerk media, he gets to sell himself as special, they get to fill their pages with something.
All of his claims in general seem to always reference some "evidence" that's never available in any form. A con-man using his cons to sell his cons. His old [1] and new [1] bios are pretty telling, his achievements tend to come and go.
Absolutely agree. That's why I said "claim". Pretty unbelievable, and not really applicable to real life. I guess his point is "think out side the box".
I may have edited too late. He does seem to be an actual fighter and at least for a while under Dave Camarillo, but still very far from being a world champion. Given that he makes a living selling such tricks I think that is a compilation of random training sessions and championship fights intertwined with shots of his face and nothing more.
From what I gather from a short internet search he changed his story repeatedly depending on what sold more. He's either an experienced fighter with multiple world championship wins, or an average guy using his own tricks to win. But his name is not associated with any official leaderboard or championship win as far as I can tell.
As someone who has consistently excelled at amateur martial arts I can guarantee there's no way a world champion gets beaten by some guy pushing him off the lei tai repeatedly even after the same technique was used in every round and with all other opponents. I could knock out almost any "non-trained" person with a single well placed punch or kick, and if they weren't well placed they would still do some temporarily debilitating damage. Yet whenever I had friendly fights with well trained pros, including ones with good results in international championships but no gold medals, I have no words to describe how inadequate and unprepared I felt.
All I'm saying is that the story is not what it seems. Whether he is an actual pro worthy of a gold medal, or some incredible fluke made him fight severely unprepared opponents I don't know. But he certainly didn't win anything because he tricked the weigh-in (that's standard procedure), or because he pushed opponents off the lei tai round after round, opponent after opponent and none of those world class fighters had any recourse.
This is how a fight would look like [0]. You win that by going to a lower weight class and "pushing" only if you are perfectly able to take the hits anyway and are already good. Tricks will get you from silver to gold, not from peanut butter.
According to him, he didn't just kickbox with a 30 pound weight advantage, he also won entirely by forcing ring-outs. He essentially treated the competitions like a sumo match, something other competitors didn't typically try for or practice defending against all that much.
- if the fight was in China, big deal. They have a history of pre-MMA technique, so most of their styles are only for show. (That's what the fake Shaolin monk, Yi Long, has been demonstrating recently online, defeating leading traditional opponents using intermediate kickboxing techniques.)
- fights in China are fixed, so Tim winning anything was unlikely without connections/graft
- it takes a special kind of asshole to proclaim being a winning fighter by exploiting loopholes that way. I hope somebody punches and breaks his orbital ASAP.
Respected fighters wouldn't fight or spar with anybody who writes that way. Tim didn't prove anything, except that he's an asshole who can't be trusted.
You can learn more about MMA from inside China on Ramsey Dewey's Youtube channel:
If you want to see what world-class MMA fighting looks like today, search on Youtube for "UFC Khabib" or "UFC Israel Adesanya". They would destroy anybody inside China in seconds.
Is this verifiable? I saw a comment on that page saying:
> I’m not saying you couldn’t win a kickboxing tournament like that. I just think it’d be nice if he at least gave the year and location of the tournament so interested parties could look into it.
> A third party asks them to "assume that a coin is fair, i.e., has an equal probability of coming up heads or tails when flipped. I flip it ninety-nine times and get heads each time. What are the odds of my getting tails on my next throw?"
Istm that Fat Tony here gets the right answer to the wrong question. Whether we should assume this is not part of the question. That this is a useful thing to ask IRL doesn't change the fact that if you posed this to me IRL and smugly quoted the ludic fallacy at me for correctly answering your question I'd be strongly tempted to deck you.
That’s actually exactly what I was going to say. Of course you should update your priors continuously and thus evolve your model. A model is never perfect but it’s the best approximation to reality we have. In the end, Fat Tony has a model in his head, too.
Right - "assume at the start that the coin is fair - you are free to update the assumption as you go" is a different thing than they said. Usually "assume that" assumptions are meant to hold throughout the question.
As Randall says, "communicating badly and then acting smug when you're misunderstood is not cleverness."
I think the point would be that expertise in those fictional scenarios doesn't correlate with expertise in real scenarios, and many experts only have been trained in fictional scenarios.
But this is experts we are talking about. There's supposed to be some degree of translation between models and real life. The point of the fallacy is that this translation can be very debatable and restricted in many fields, and that a good observer with decent intuition can beat those models easily.
If this was about a purely intellectual roleplaying game with internal rules there would be no discussion in the first place.
> If this was about a purely intellectual roleplaying game with internal rules there would be no discussion in the first place.
Which is what makes the discussion bullshit. Because if you're starting your experiment with "assume that", that's what you're signalling you're doing.
I think the Ludic Fallacy would be better described as, "A tendency to be overconfident that you know what the game is." If you read the Black Swan, what Taleb is mainly railing against are people who are completely confident that because they have a model, that it must therefore be correct, and refuse to remember all the caveats, and what could happen if their model is wrong.
Yeah, the only thing it proves is that when a scientist says "assume X" to another scientist the common understanding is that it means "in a situation where it is given that X is true, no matter how ridiculous that might be in real life."
As for more reasons why this is bullshit, see the gambler's fallacy and the Monty Hall problem – intuition is often terrible at arriving at the right prediction.
But the assumption is the point. When you have enough data to suggest your model is wrong, you should throw away the model and the assumptions it's based on, not the data.
The fact that your model can be justified as technically correct is irrelevant. When the data doesn't fit the model any more, the supposed absolute correctness of the textbook model blocks your ability to understand what's happening.
This isn't even about games, but about whether it's possible to be open-minded enough to consider that simple textbook "solutions" are not guaranteed to be a good fit for real problems - especially if you don't understand their limitations or the assumptions they're based on.
I remember reading some kind of fantasy anthology of Sherlock Holmes pastiches. In one story there was interesting twist on the famous quote "Once you eliminate the impossible, whatever remains, no matter how improbable, must be the truth.". It was changed to the effect that "once whatever remains is ridiculously improbable, you should probably reconsider what is actually impossible".
But the example is poorly communicated. It's not clear whether the entire quoted portion is:
A) a hypothetical introduced by the idiom "Assume that..." (which introduces a statement of fact in the hypothetical situation), and we are discussing a scenario in which the coin is in fact fair, in which case Dr. John is correct and Fat Tony is committing the gambler's fallacy, or
B) a scenario in which a third-party tells someone that the coin is fair, but that is simply an assumption that should be updated by new evidence, in which case Dr. John would be committing the ludic fallacy.
The example isn't instructive because anyone reading this and thinking of scenario A isn't disputing the idea that, if this happened in reality, you should throw away the model. They're just interpreting the phrase "assume that" differently.
> When you have enough data to suggest your model is wrong, you should throw away the model and the assumptions it's based on, not the data.
In the example, you agreed to assume the coin is fair. That is, you agreed to stick to the model even if it turns out to be wrong. Throwing the model away, however suggested by the evidence, is just violating the rules you agreed to.
I'd call it the opposite. There is statistically no such thing as 99 heads in row. So when someone says "assume the coin toss is fair, 99 heads in row happen, what are the odds the next will be heads". Your answer should not be "50%". Your answer should be "You just asked me a bullshit question because there is basically no such thing as 99 heads in a row in the real word. In a hypothetical world maybe but in the real world nope"
Or maybe to be nicer about it the proper response is "So are we talking about the real world because in the real world the odds of 99 heads in a row are 1 in 2^100 which is effectively zero so I just want to verify you understand that your hypothetical situation and conclusion will have no basis in reality. If you actually saw 99 heads in a row then the odds are infinitely higher the coin is broken and is not fair"
But it's vague and meaningless enough you can pull it out when you want to prove something involving statistics or models not working, which they mostly don't.
And yet companies make a fortune betting on markets or sports using those exact "Ludic Fallacy" models - like linear regressions, probability etc. They know it's real life, and many someone else is fixing the coin toss, but they can still get an advantage. In any real casino, 99 blacks in a row and they'd shut down the table.
...and then a financial crisis hits and suddenly they expect the government to bail them out because they didn't account for that risk in their models.
Ha ha well that’s a different story more to do with bonus culture. An example of where the street smarts might come into play in modelling the modellers and predicting 2008
The tragedy of it of course is that the incompetent pension managers will keep their last ten years of performance bonuses, and the citizens of Alberta will get ... tax increases.
While some analogies of a game are in place (depending on someone's action, it's "fail" or "progress"), I think that the worst fallacy is that one always can, and should, "win". Depending on the attitude, it is anything from frustrating (obsessing why one has failed despite the effort, or ending in a relationship with a wrong person) to outright dangerous.
All models are simplifications of real-world phenomena, the question is how useful they are. Taleb’s Ludic Fallacy is a useful prod to remind us to consider our core assumptions.
In the "suspicious coin" example, there is an opening assumption that the coin is fair, but it transpires clear evidence to the contrary.
It isn't a fallacy to continue to treat this as a game: it has just become sensible to drop the assumption and treat it as a game where you are unsure about whether the coin is fair (as the second player in the example, in fact, does).
> In the "suspicious coin" example, there is an opening assumption
I understood it differently: there are no assumptions per se, just a request to make an assumption. The request is made by a third party and all this is part of the thought experiment.
> It isn't a fallacy to continue to treat this as a game
True. The article states that “The ludic fallacy here is to assume that in real life the rules from the purely hypothetical model (where Dr. John is correct) apply.”.
> treat it as a game where you are unsure about whether the coin is fair
This significantly modifies the scope of the original game.
I understood this as an example of how simplified models might easily stop being useful because of real life conditions.
That is the difference between a model and the reality. It "should" be fair, but in reality (with all the factors you see, and maybe several others that you don't) it seem to not be working that way.
The book Range talks about a similar idea, the idea of "kind" and "wicked" learning environments.
In kind environments (most games) "patterns recur, situations are constrained, and importantly, every time you do something you get feedback that is totally obvious, all the information is available, the feedback is quick, and it is 100% accurate"
In contrast, wicked environments (most of the rest of life!!!) none of the properties of kind environments hold, and in some extreme cases the feedback teaches you the exact wrong lesson.
In the book, he similarly warns against taking the lessons from successful people in chess or golf and applying them to our own wicked lives.
Can't help but feel that people here are missing the point and perhaps too hung up on the specific example in the wikipedia article. The broader point is about the misuse and misapplication of technical/"rational" methods in real life i.e. not thinking about whether the model can actually be usefully applied in a certain real world situation. For example, blindly following rote statistical methods/not understanding their assumptions is what got us into the whole psychology replication crisis mess.
Yes. One of the key points Taleb likes to make is that many real life situations are fat tailed, i.e. extreme events are much more likely than what someone assuming a normal distribution would account for, which might help explain why the financial system turns out to be so extremely fragile over and over again every time a major event/crisis occurs.
It sounds obvious, but in practice it's not. It's an election year, so take polling as a great example:
Every poll of a race comes with two numbers, one a fraction of support for whatever issue or candidate is being measured, and the other a "margin of error" (which in the industry is a 95% confidence interval, I believe). This is just a statistical measure based on sample size. It's backed by two centuries of math and no one interestingly disputes the way the number is calculated or whate it means.
And there are a LOT of these polls taken. So take all those polls, check their variance, and you'll find that it's much higher than the value you'd expect given the margins of error they reported. This is a routine effect. So square that: why are the MoE numbers "wrong", given that multiple measurements of the same number are giving values with more noise than expected?
The answer is exactly this paradox. The model, that all these polls are measuring the same thing, is wrong. They aren't measuring the same thing. The different polls use different sampling methods, they weight their data using different algorithms, with opinion polls they phrase the questions slightly differently (or just ask the same questions in a different order), all of which affect the results.
And this happens everywhere in science. It's a frightenly easy mistake to make, especially as data sets get large.
Hmm this is a surely a common mistake to make but what does it have to do with games? If you sampled poker plays with similar differences you'd get similar errors.
"different", but not in decimal points. Sometimes what you interpret as noise could give you vastly different results. And it can be bigger than just positive feedback loops.
That's Taleb. Taleb ran a fund that bought options way out of the money. This loses money every year, unless there's a big crash. His fund happened to be active in 2008, and made a ton of money that year. He doesn't release the numbers for other years. Not clear if this is a net win over a full business cycle.
Taleb is sort of a counter to Black-Sholes option pricing. Black-Sholes assumes a Gaussian distribution. Given that assumption, a few numbers let you quantify risk. That's convenient, but somewhat unrealistic, and was taken way too seriously by the bond market from the 1980s to 2008. It provided a philosophical underpinning for the junk bond market. (They can't possibly all go bad at the same time, can they?)
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[ 2.8 ms ] story [ 147 ms ] threadAnother criticism by Nassim Taleb to this field is the use of the normal distribution to distributions that are not normal at all. This could lead to the problem that I described in the previous paragraph.
Good examples are carry trades and insurance market punts - people know that the central bank of Japan has to do X, they know that people are getting old in the developed world... betting on this happening is mostly a clever thing to do.
Every so often at random along comes an event that throws all this into the air - this might be something massive or something small but when it happens people go bust. For example, well look around.
There is a lot of talk that "oh we will know when we are in trouble and we will just change strategy" but sometimes that just proves not to be so. The point is that getting to play the game well for long enough to prosper is just luck, getting out at the right time is just luck. You can be stupid and get taken to the cleaners at any time, and you can play well and just be "the fat rabbit" at any time as well. So, be lucky and play well.
The fallacy is that winning a world championship at kickboxing must mean that you're an excellent kickboxer, but nope.
https://www.youtube.com/watch?v=rIAXIubSTkc
The fact that he was able to hold off experienced fighters, even if they were below his weight class, means he was plenty qualified to be there despite his very modest self assessment.
[Edited from here] He seems to be an actual fighter under Dave Camarillo but the framing of this story, that he's just an average "stuff my face with peanut butter sandwiches, tricked the weigh-in" kind of guy, is just in order to sell his "life hacks" books.
All I can find is that 1999 was the second year for the championship which could mean not very strong competition. But there's no mention of him in any Wushu/Sanda/Sanshou championship. He also used to claim that he is a "Cage fighter in Japan, vanquisher of four world champions (MMA)" (since removed from his page). Being a 4 time world champion would have contradicted his "just a regular guy using life hacks" premise. Without an actual record of him winning that "Chinese Kickboxing National Championships 1999" I guess he's just peddling the same "tricks" from his book. One of them might be "just say you did it".
You opponent will not wait for you to bend the rules a few times before they react unless the first bend knocks them out. Pushing people off the fighting surface might work once, maybe twice. If that's the only weapon in a fighter's arsenal I see a fractured skull in their immediate future. :)
No, the more I look at this the more I realize the story of the regular guy exploiting loopholes to win a championship is a good "how the little guy won" story but also a complete fabrication. It's only good for the circle-jerk media, he gets to sell himself as special, they get to fill their pages with something.
All of his claims in general seem to always reference some "evidence" that's never available in any form. A con-man using his cons to sell his cons. His old [1] and new [1] bios are pretty telling, his achievements tend to come and go.
[0] https://web.archive.org/web/20070308133948/http://fourhourwo...
[1] https://tim.blog/about/
> Wired Magazine’s “Greatest Self-Promoter of 2008”
Certainly
It being some kind of unblockable kick is BS of course.
There appears to be some footage of it in this video.
https://www.youtube.com/watch?v=ODoVqXgblyw
From what I gather from a short internet search he changed his story repeatedly depending on what sold more. He's either an experienced fighter with multiple world championship wins, or an average guy using his own tricks to win. But his name is not associated with any official leaderboard or championship win as far as I can tell.
As someone who has consistently excelled at amateur martial arts I can guarantee there's no way a world champion gets beaten by some guy pushing him off the lei tai repeatedly even after the same technique was used in every round and with all other opponents. I could knock out almost any "non-trained" person with a single well placed punch or kick, and if they weren't well placed they would still do some temporarily debilitating damage. Yet whenever I had friendly fights with well trained pros, including ones with good results in international championships but no gold medals, I have no words to describe how inadequate and unprepared I felt.
All I'm saying is that the story is not what it seems. Whether he is an actual pro worthy of a gold medal, or some incredible fluke made him fight severely unprepared opponents I don't know. But he certainly didn't win anything because he tricked the weigh-in (that's standard procedure), or because he pushed opponents off the lei tai round after round, opponent after opponent and none of those world class fighters had any recourse.
This is how a fight would look like [0]. You win that by going to a lower weight class and "pushing" only if you are perfectly able to take the hits anyway and are already good. Tricks will get you from silver to gold, not from peanut butter.
[0] https://www.youtube.com/watch?v=tQsTOVCqduY
- if the fight was in China, big deal. They have a history of pre-MMA technique, so most of their styles are only for show. (That's what the fake Shaolin monk, Yi Long, has been demonstrating recently online, defeating leading traditional opponents using intermediate kickboxing techniques.)
- fights in China are fixed, so Tim winning anything was unlikely without connections/graft
- it takes a special kind of asshole to proclaim being a winning fighter by exploiting loopholes that way. I hope somebody punches and breaks his orbital ASAP.
Respected fighters wouldn't fight or spar with anybody who writes that way. Tim didn't prove anything, except that he's an asshole who can't be trusted.
You can learn more about MMA from inside China on Ramsey Dewey's Youtube channel:
https://www.youtube.com/user/balletman
If you want to see what world-class MMA fighting looks like today, search on Youtube for "UFC Khabib" or "UFC Israel Adesanya". They would destroy anybody inside China in seconds.
> I’m not saying you couldn’t win a kickboxing tournament like that. I just think it’d be nice if he at least gave the year and location of the tournament so interested parties could look into it.
> A third party asks them to "assume that a coin is fair, i.e., has an equal probability of coming up heads or tails when flipped. I flip it ninety-nine times and get heads each time. What are the odds of my getting tails on my next throw?"
Istm that Fat Tony here gets the right answer to the wrong question. Whether we should assume this is not part of the question. That this is a useful thing to ask IRL doesn't change the fact that if you posed this to me IRL and smugly quoted the ludic fallacy at me for correctly answering your question I'd be strongly tempted to deck you.
https://xkcd.com/169/ comes to mind.
As Randall says, "communicating badly and then acting smug when you're misunderstood is not cleverness."
If you’ve just lost two billion dollars, or killed 200,000 people in a preventable war, no one cares that the assumptions were reasonable.
"Assume you jump off a bridge. Would you be dead?"
"No, because I'd change my mind. What, you think I'd jump off a bridge because someone tells me to?"
"No, but I'd rather expect you'd assume it because I tell you, in the context of a hypothetical."
If this was about a purely intellectual roleplaying game with internal rules there would be no discussion in the first place.
Which is what makes the discussion bullshit. Because if you're starting your experiment with "assume that", that's what you're signalling you're doing.
As for more reasons why this is bullshit, see the gambler's fallacy and the Monty Hall problem – intuition is often terrible at arriving at the right prediction.
The fact that your model can be justified as technically correct is irrelevant. When the data doesn't fit the model any more, the supposed absolute correctness of the textbook model blocks your ability to understand what's happening.
This isn't even about games, but about whether it's possible to be open-minded enough to consider that simple textbook "solutions" are not guaranteed to be a good fit for real problems - especially if you don't understand their limitations or the assumptions they're based on.
And it doesn't just apply to statistics.
A) a hypothetical introduced by the idiom "Assume that..." (which introduces a statement of fact in the hypothetical situation), and we are discussing a scenario in which the coin is in fact fair, in which case Dr. John is correct and Fat Tony is committing the gambler's fallacy, or
B) a scenario in which a third-party tells someone that the coin is fair, but that is simply an assumption that should be updated by new evidence, in which case Dr. John would be committing the ludic fallacy.
The example isn't instructive because anyone reading this and thinking of scenario A isn't disputing the idea that, if this happened in reality, you should throw away the model. They're just interpreting the phrase "assume that" differently.
In the example, you agreed to assume the coin is fair. That is, you agreed to stick to the model even if it turns out to be wrong. Throwing the model away, however suggested by the evidence, is just violating the rules you agreed to.
Or maybe to be nicer about it the proper response is "So are we talking about the real world because in the real world the odds of 99 heads in a row are 1 in 2^100 which is effectively zero so I just want to verify you understand that your hypothetical situation and conclusion will have no basis in reality. If you actually saw 99 heads in a row then the odds are infinitely higher the coin is broken and is not fair"
This has no meaning.
But it's vague and meaningless enough you can pull it out when you want to prove something involving statistics or models not working, which they mostly don't.
Until they don't.
This happened in March, and I just love the Reddit headline:
The trade was easy money until fat tails caught up with it. I think Matt Levine also discussed this, as did HN.https://old.reddit.com/r/wallstreetbets/comments/g5r5n6/some...
https://www.forbes.com/sites/antoinegara/2020/03/25/billiona...
The tragedy of it of course is that the incompetent pension managers will keep their last ten years of performance bonuses, and the citizens of Alberta will get ... tax increases.
Two literal takes on that are:
- "Super Seducer: How to Talk to Grils" a (somewhat controversial) game on Steam by Richard La Ruina, a Pick-Up Artist - https://store.steampowered.com/app/695920/Super_Seducer__How...
- "If Dating was like Who Wants to be a Millionaire" - https://www.youtube.com/watch?v=7E33j3gQg98
While some analogies of a game are in place (depending on someone's action, it's "fail" or "progress"), I think that the worst fallacy is that one always can, and should, "win". Depending on the attitude, it is anything from frustrating (obsessing why one has failed despite the effort, or ending in a relationship with a wrong person) to outright dangerous.
In the "suspicious coin" example, there is an opening assumption that the coin is fair, but it transpires clear evidence to the contrary.
It isn't a fallacy to continue to treat this as a game: it has just become sensible to drop the assumption and treat it as a game where you are unsure about whether the coin is fair (as the second player in the example, in fact, does).
I understood it differently: there are no assumptions per se, just a request to make an assumption. The request is made by a third party and all this is part of the thought experiment.
> It isn't a fallacy to continue to treat this as a game
True. The article states that “The ludic fallacy here is to assume that in real life the rules from the purely hypothetical model (where Dr. John is correct) apply.”.
> treat it as a game where you are unsure about whether the coin is fair
This significantly modifies the scope of the original game.
I understood this as an example of how simplified models might easily stop being useful because of real life conditions.
In kind environments (most games) "patterns recur, situations are constrained, and importantly, every time you do something you get feedback that is totally obvious, all the information is available, the feedback is quick, and it is 100% accurate"
In contrast, wicked environments (most of the rest of life!!!) none of the properties of kind environments hold, and in some extreme cases the feedback teaches you the exact wrong lesson.
In the book, he similarly warns against taking the lessons from successful people in chess or golf and applying them to our own wicked lives.
I enjoyed it but felt like it was a bunch of other peoples ideas (Taleb, Kahneman, Levitin, etc) strung together.
Bears in woods and catholic popes come to mind.
Every poll of a race comes with two numbers, one a fraction of support for whatever issue or candidate is being measured, and the other a "margin of error" (which in the industry is a 95% confidence interval, I believe). This is just a statistical measure based on sample size. It's backed by two centuries of math and no one interestingly disputes the way the number is calculated or whate it means.
And there are a LOT of these polls taken. So take all those polls, check their variance, and you'll find that it's much higher than the value you'd expect given the margins of error they reported. This is a routine effect. So square that: why are the MoE numbers "wrong", given that multiple measurements of the same number are giving values with more noise than expected?
The answer is exactly this paradox. The model, that all these polls are measuring the same thing, is wrong. They aren't measuring the same thing. The different polls use different sampling methods, they weight their data using different algorithms, with opinion polls they phrase the questions slightly differently (or just ask the same questions in a different order), all of which affect the results.
And this happens everywhere in science. It's a frightenly easy mistake to make, especially as data sets get large.
Taleb is sort of a counter to Black-Sholes option pricing. Black-Sholes assumes a Gaussian distribution. Given that assumption, a few numbers let you quantify risk. That's convenient, but somewhat unrealistic, and was taken way too seriously by the bond market from the 1980s to 2008. It provided a philosophical underpinning for the junk bond market. (They can't possibly all go bad at the same time, can they?)