What is probability anyway?
Personally Iâm not a math guy but I find probability interesting. More specifically, the psychology behind how we perceive probability.
Defining probability can be quite brain wracking to think about. Weâre trying to quantify something that is inherently unquantifiable. Trying to understand an event that is fundamentally random. Very abstract if Iâm being honest.
Perceiving Probability
We arenât computers, so in termâs of feeling and perceiving probability, weâre not very good at it.
Gamblerâs Fallacy
Lets suppose you have a fair coin. You flip it 5 times. You get 5 heads in a row.
You might think to yourself, âOk, surely the next flip will be tails, right?â.
Thats called the Gamblerâs Fallacy. Itâs quite a powerful psychological phenomenon that can be used to manipulate people into making bad decisions.
Availability Heuristic
Lets say youâre at the arcade and youâre playing the game with the claw, trying to get a specific teddy bear.
Suppose you get the teddy bear you wanted on the first try, and stop playing. Afterwards, someone else informs you that the probability of getting a bear is 1 in 5000. You wonât internalize that information because youâve gotten the bear you wanted on the first try. The next time you play the game, your tolerance for stopping will be much, much higher than the average person.
If someone else asks you what the probability of getting the bear is, you might remember someone mentioning â1 in 5000â but you wonât exactly feel and perceive it as 1 in 5000.
This is called the Availability Heuristic. Itâs a cognitive bias that causes us to overestimate the probability of events that are more easily recalled. It can lead to poor decision-making because memories that are easy to recall are often inadequate for determining the likelihood of future events.
Salience and Salient Events
Salience is the degree to which something stands out or how noticeable something is.
Iâm sure most would agree that plane crashes are more publicized than car crashes. Car crashes donât nearly as much engagement on social media since theyâre so common. This may cause someone to overestimate the risk of them since theyâre more salient in their memory. Another similar example is Shark Attacks.
This can cause people to:
- Overestimate the risk of plane crashes - unnecessary anxiety and fear
- Underestimate the risk of car accidents - cause one to drive more recklessly
Confirmation Bias
This is another cognitive bias that causes us to seek out information that confirms our beliefs and ignore information that contradicts our beliefs.
Like for example on reddit (similarly with other forms of social media), you are much more likely to follow a subreddit that agrees with your beliefs and you are much less likely to follow a subreddit that disagrees with your beliefs.
Basically putting yourself in an echo chamber with no way in from the outside.
But I digress, thatâs a whole other topicâŚ
Sorry bout the scary image â¤ď¸
Back to probability.
For a confirmation bias example regarding probability, imagine someone strongly believes that their favorite sports team is going to win a game.
Theyâve been following the team for years and theyâve seen them win many games. Theyâve also seen them lose many games, but theyâve never seen them lose to this specific opposing team.
They may seek out and focus on information like stats that show their team has a good record, while ignoring stats that contradict their belief, like that the opposing team has a strong defense.
Anchoring Bias
This causes people to rely too heavily on a single piece of information when making decisions. Itâs also known as the first impression effect.
As an example, letâs suppose someone asked you the probability of an event occuring. Your first instinct is to consider circumstances that affect the outcome and recall the probability of similar events that have happened. These would help to inform your estimate.
However, before you make your guess, the person asking you the question, mentions that the answer is between 20% and 40%. This is an arbitrary range.
Chances are, youâll end up saying 30%, which is right in the middle, even if the actual answer is much lower or much higher.
Hindsight Bias
Hindsight bias is simply when someone looks back at an event and believes they predicted the outcome, even if they failed to act on that âpredictionâ. Itâs also known as the âI knew it all along phenomenonâ. It might not seem relevant in terms of probability, but lemme explain.
While probability is about predicting the future, hindsight bias can still be a problem because it can distort our perception of the accuracy of our predictions.
Suppose you hear that the stock market is soon to crash. However, you decide not to sell your stocks because you think the market is too unpredictable and you donât want to miss out on potential gains. Eventually, the market does crash and you lose money.
After the crash, you might look back and think that it was obvious that the market was going to crash, and that you should have sold your stocks when you had the chance. This is hindsight bias.
The problem with this is that it can lead people to overestimate their ability to predict or control the likelihood of future events based on their past experiences or knowledge.
Ending Off
Thereâs a lot more to dive into but I hope you enjoyed this little dive into probability and how we might perceive things differently to how they actually are. I definitely enjoyed writing and exploring this topic, was quite refreshing đ
Peace âď¸