To me it seems to highlight the division between the mind and the will. He seems to say that you can control your mind, but you can not control the way your mind makes you control your mind.
I see what you're saying, but I don't think I have a moral obligation to take every available opportunity to make money. I'm reminded of an event when I was about 10 years old: I took some small change and threw it in the trash. I don't remember why I did it, but I do remember that my dad was really offended. But, hey, it was my money. Betting is fine but I don't see why it should be privileged over other means of expression.
This seems a little bossy to me. Beyond the issue of transaction costs ("the vig") and the effort of gathering the information to try to beat the market (this would an intellectual hobby, like blogging, doing crosswords, or following the horses, that would make sense to do if enjoyable in itself), maybe some people don't want to bet. I have no problem with betting--I enjoy it--but I'm a little puzzled by the statement that people should be betting, or that they have some sort of moral obligation to put their money where their mouth is. Maybe you personally don't "really believe" things unless you put money on them, but not everybody feels that way.
OK, one more try. First, you're picking 3^^^^3 out of the air, so I don't see why you can't pick 1/3^^^^3 out of the air also. You're saying that your priors have to come from some rigorous procedure but your utility comes from simply transcribing what some dude says to you. Second, even if for some reason you really want to work with the utility of 3^^^^3, there's no good reason for you not to consider the possibility that it's really -3^^^^3, and so you should be doing the opposite. The issue is not that two huge numbers will exactly cancel o... (read more)
OK, let's try this one more time:
To put it another way, conditional on this nonexistent person having these nonexistent powers, why should you be so sure that he's telling the truth? Perhaps you'll only get what you want by not giving him the $5. To put it mathematically, you're computing pX, where p is the probability and ... (read more)
When I do this demo in class (see here for details or here for the brief version), I phrase it as "the percentage of countries in the United Nations that are in Africa." This seems less ambiguous than Kahneman and Tversky's phrasing (although, I admit, I haven't done any experiment to check). It indeed works in the classroom setting, although with smaller effects than reported by Kahneman and Tversky (see page 89 of the linked article above).
You write: "I'm sure they had some minor warnings of an al Qaeda plot, but they probably also had minor warnings of mafia activity, nuclear material for sale, and an invasion from Mars." I doubt they had credible warnings about an invasion from Mars. But, yeah, I'd like the FBI etc. to do their best to stop Al Quaeda plots, Mafia activity, and nuclear material for sale. I wonder if you're succumbing to a "bias-correction bias" where, because something could be explainable by a bias, you assume it is. Groups of people do mak... (read more)
I agree with what you're saying. But there is something to this "everything is connected" idea. Almost every statistical problem I work on is connected to other statistical problems I've worked on, and realizing these connections has been helpful to me.
The problem with harping on everything is connected is that it is, but good systems are created bottom up instead of top down. You didn't sit down and say "All statistical problems are governed by overarching concept X, which leads to the inference of methods a, b, and c, which in turn lead to these problems." You said, "I have these problems, and certain similarities imply a larger system."
It's like biology, Linnaeus did not come up with his classification system out of thin air, he first studied many individual animals and their pr... (read more)
You write: "There are no surprising facts, only models that are surprised by facts."
That's deterministic thinking. Surprising facts happen every once in awhile. Rarely, but occasionally.
But I agree with your general point. Surprise is an indication that you have a problem with your model, or that you have prior information that you have not included in your model.
You ask, "would potatoes chips be a 'waste of taste', if some people eat too much of them? Is TV a "waste of time", if some people watch too much? Can we say that there is more of a tendency to buy too many lottery tickets than to do too much of any other thing one can do too much of?"
I think much of your question is better addressed to the Eliezer, who wrote the original entry with the "waste of hope" phrase. In any case, if someone buys so many lottery tickets that it interferes with other aspects of life (e.g., not b... (read more)
I think the concern is not with people who buy the occasional lottery ticket for fun but with addicts who gamble away a large proportion of their available money.
Just to be clear . . . going back to your first paragraph, that 0.5 is a prior probability for the outcome of one draw from the urn (that is, for the random variable that equals 1 if the ball is red and 0 if the ball is white). But, as you point out, 0.5 is not a prior probability for the series of ten draws. What you're calling a "prior" would typically be called a "model" by statisticians. Bayesians traditionally divide a model into likelihood, prior, and hyperprior, but as you implicitly point out, the dividing line between these is not clear: ultimately, they're all part of the big model.