With the born storyteller's command of narrative and imaginative approach, Leonard Mlodinow vividly demonstrates how our lives are profoundly informed by chance and randomness and how everything from wine ratings and corporate success to school grades and political polls are less reliable than we believe.

By showing us the true nature of chance and revealing the psychological illusions that cause us to misjudge the world around us, Mlodinow gives us the tools we need to make more informed decisions. From the classroom to the courtroom and from financial markets to supermarkets, Mlodinow's intriguing and illuminating look at how randomness, chance, and probability affect our daily lives will intrigue, awe, and inspire.

By showing us the true nature of chance and revealing the psychological illusions that cause us to misjudge the world around us, Mlodinow gives us the tools we need to make more informed decisions. From the classroom to the courtroom and from financial markets to supermarkets, Mlodinow's intriguing and illuminating look at how randomness, chance, and probability affect our daily lives will intrigue, awe, and inspire.

*From the Trade Paperback edition.*Speaking as someone who hasn't taken a math course since 11th grade, I was pleasantly surprised to find I could follow the concepts and finally associate them with my verbally oriented world. I have gained confidence with common statistical terminology, and I am strangely reassured by the research that asserts we have far less control than we imagine. I now feel justified in selecting my wine on the basis of the label design.read more

Delightful romp through some of the history of probability and statistics as it pertains to how our brains are wired to misinterpret odds. The book periodically suggests why evolution favored such wiring and how it benefits us in fast-act situations, and it tricks us in others.Mlodinow frequently starts an interesting anecdote, only to jump to something else that is interesting and related so as to "bait" the reader who is eager to find out the answer and the rest of the story. After completing the related topic he then completes the original anecdote. I loved this! While it was maddening to not jump to finish the original anecdote, because I was so curious, I also enjoyed the excursions and had fun with this style.I WILL read other of Mlodinow's books, based on my experience with this one.For those of us that had statistics in high-school and college, this is a special treat, because it brings back memories of our studies (without the tedious math that turns some people off), but with particularly interesting real-world stories, such as the "Monty Hall" problem of a game show with 3 doors with two goats and a new car, each behind a different door. Suppose you pick one door, and before opening it the host opens another behind which is a goat. Should you switch doors? You should!This doesn't usually make intuitive sense, but Mlodinow shows in a very clear and easily readable way why you should switch....but not until he explains some interesting related historical background... You are hooked!And, for those wondering why some people make it big, while other similarly talented individuals go unnoticed, Mlodinow shows that usually just chance explains the discrepancy. Lest one feel that this is too fatalistic, he points out that hard work and preparations can increase one's odds for success. What about rankings of colleagues at work, done be many companies? Mlodinow shows that the usual sample sizes used to make the ranking render the results meaningless. (100 individuals is too small a sample size...) All-in-all, a GREAT read!read more

The first half of Leonard Mlodinow’s essay on randomness charts the history of chance and gives a primer on the basic principles of probability. This is mildly interesting insofar as it recounts the endeavours of oddball enlightenment characters (many of the French, like Bernouilli family) and how they stumbled on the idea of probability, and iteratively worked out its implications, and hated each other all the while. Mlodinow briefly states and, to my mind, under-emphasises, the historical and cultural significance of probability in the scientific worldview: it affords us an alternative to reductionism: not only is the need to delve ever further into microscopic (and atomic) detail to find “essential” qualities avoided; the importance of cause and effect at all is significantly relegated. No longer must we establish “this caused that”; probability cares simply that “the occurrence of this” is *correlated* with “the occurrence of that”. Old habits die hard, of course, and the reductionist crowd does tend to draw a causative deduction from a strong correlation. The great Enlightenment sceptic David Hume (who sadly does not rates a mention here) would surely spin in his grave. Having armed the reader with some rudimentary knowhow about normal distributions and standard deviations (it is well, and lightly explained: I wish my high school maths teacher had made it this simple), in the second half of the book Mlodinow takes anecdotal pot-shots at the illogicalities of our modern life. They are legion. Some of his examples are fascinating (the probability of *someone* beating Babe Ruth’s record *at some time* are far greater than you’d think) some are a little old hat (the surprisingly high chance of footballers on the same field sharing a birthday), others are enlightening (the same manager night have consistently beaten the January/December annual performance of the Dow, but not the April/March annual performance), the implication being the parameters, periods and frequencies selected to a sample a data set (often chosen after collection of the data) can help to fit the data to a more compelling story) and some are jaw-droppers (in a period, the distribution of a set of mutual fund managers is exactly as you’d expect - some outperformers, some under performers most bunched around the middle: on the other hand, the comparison over two discrete periods was utter chaos: implication: performance across the sector is “volatile” (their word) or “more or less random (“Mlodinow’s”) if this is right, as stated, it is a matter of international outrage.However, I don’t think it is quite the full picture. Firstly, the data set Mlodinow uses to illustrate this point is precisely two. Having spent the first half of the book elegantly explaining how “false positives” - conclusions as to randomness (or non-randomness) should not be drawn from extremely small samples, this looks like a bit of an own goal. Were Mlodinow’s sample 100 periods, and the relative performance between the managers still all over the place, there would be a better case for outrage. Secondly, in lionising the normal distribution, which he says “rules our lives”, Mlodinow skates over the tendency of human interactions – of which are lives are comprised, after all – to be interdependent (that is, not truly random at all). A normal curve plots the distribution of discrete events (i.e., events whose occurrence do not affect each other’s probability). But, if you yell “fire” run for the exit in a cinema, you make it more likely other people will too. If a stock starts falling, its price will drop and people will be inclined to sell. This is why market crashes and bank runs happen. Writers like Phillip Ball and Benoit Mandelbrot have written compellingly about this interdependence. Where there events are reflexive in this way, probabilities follow a “power law” distribution (this looks rather like a normal curve in the middle, but crucially has a much longer, fatter tail at each end). Here, things can and do happen which are so far outside the realms of random probability as to be impossible. These are the “Black Swans” of Nassim Nicholas Taleb’s recent book. The lesson the financial community has learned (well: apparently *hasn’t* learned) is that one models interdependent events as if they were randomly distributed at one’s utter peril: the events accounting for Long Term Capital Management and Lehman Brothers should not have happened in hundreds of millennia.It is a little unwise, therefore, to write off portfolio theory purely on the basis of normal distributions (there are plenty of other grounds on which to write it off). On the other hand, Mlodinow may well be right to suspect that the “wisdom of crowds” aspect from which markets undoubtedly suffer (and markets are well represented by investment managers) conceals a singular lack of differentiation. The interesting exercise, not done, would be to compare the bell curves of individual investment managers. A particular succession of home runs may be put down to the size of a given hitter’s standard deviation, but a batter still has to earn his own bell curve: It may have been unlikely in the extreme for Roger Maris to hit 61 home runs in a season, but it would have been as good as flat out impossible for me to.That said, Mlodinow’s central thesis - that we habitually mistake expertise and talent for a “lucky streak” - is an attractive one and it is interesting exercise to apply it to one’s own sacred cows. And, for that matter, one’s bêtes noires.read more

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