We’ll conclude this week’s edition with this reality check of a piece for all of us who feel good about betting on knowing the future. The piece is by Dan Gardner, the co-author of the superb book ‘Superforecasting: The Art and Science of Prediction’ along with the legendary Phil Tetlock. Tetlock and Gardner drew upon the former’s work in The Good Judgement Project which shows how amateurs were better at predicting than experts in that particular field. In this blog, Gardner rants away at the improbability of events bringing together the concepts of chaos theory and multiplicative probabilities.
“…the future which actually does unfold — which is our present reality — is extremely contingent. And fantastically improbable.”
He starts with this thought experiment dreamed up by the great Daniel Kahneman:
“He invites us to consider three leaders whose impact on the 20th century was massive — Hitler, Stalin, and Mao. Each came to power backed by a political movement that would never have accepted a female leader, but each man’s origins can be traced to an unfertilized egg that had a 50% chance of being fertilized by different sperm cells and producing a female zygote that would become a female fetus and finally a female baby. That means there was only a 12.5% chance that all three leaders would be born male, and an 87.5% chance that at least one would be born female. The ripple effects of different results are unknowable but potentially enormous. If Anna Hitler had been born on April 20, 1889, in Braunau am Inn, Austria, World War II might never have happened — or a smarter Nazi dictator might have visited even worse upon us by making shrewder decisions.”
He then goes onto show how even this is overstated if you were to consider the several low probability events involved:
“But here’s a funny thing: That back-of-the-envelope calculation actually overstates the probability of Hitler, Stalin, and Mao all being born male.
After fertilization, an egg must implant in the uterus for a pregnancy to occur. Scientists estimate that between one-third and one-half of fertilized eggs fail to implant. If we take that low figure and apply it to the scenario above, we find the probability of Hitler, Stalin, and Mao all being born boys is … 3.7%.
And even that overstates the probability! Hitler, Stalin, and Mao were all born in the 19th century, when the likelihood of a mother successfully completing a pregnancy and delivering a healthy baby was far lower than now. Factor that in and the tiny probability would shrink further. I don’t have the relevant stats so I can’t make that calculation. But if I very optimistically assume that 90% of pregnancies would be brought to term and result in a successful delivery — I think the real numbers would be lower — it would reduce the probability of Hitler, Stalin, and Mao all being born boys to … 2.6%.
And remember, that’s the probability of Hitler, Stalin, and Mao merely being born as boys. They would still have to survive that first, dangerous year of life. In the 19th century, in most of the world, around one-quarter of infants died. So the probability of Hitler, Stalin, and Mao all being born boys and all surviving their first year of life would be … 1.1%.
And this just gets Hitler, Stalin, and Mao to their first birthdays! They would still be at risk of all the childhood diseases that commonly took children’s lives (cholera, diphtheria, tuberculosis, etc.) as well as all the routine accidents, like being trampled by a horse.
If they survived all that, Hitler, Stalin, and Mao still had to face countless other risks along the way to becoming a history-shaping tyrant — they all encountered major physical dangers on top of the routine dangers anyone faced — and each risk they experienced further reduced the probability that all three would take power.”
If you want to read our other published material, please visit https://marcellus.in/blog/
Note: the above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this publication in any shape or form. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India as a provider of Portfolio Management Services. Marcellus Investment Managers is also regulated in the United States as an Investment Advisor.
Copyright © 2022 Marcellus Investment Managers Pvt Ltd, All rights reserved.