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Naive Probabilism
Harry Crane∗
March 13, 2020

When gambling, think probability.

When hedging, think plausibility.
When preparing, think possibility.
When this fails, stop thinking. Just survive.

Naive probabilism is the (naive) view, held by many technocrats and academics, that
all rational thought boils down to probability calculations. This viewpoint is behind the
obsession with ‘data-driven methods’ that has overtaken the hard sciences, soft sciences,
pseudosciences and non-sciences. It has infiltrated politics, society and business. It’s the
workhorse of formal epistemology, decision theory and behavioral economics. Because
it is mostly applied in low or no-stakes academic investigations and philosophical mean-
dering, few have noticed its many flaws. Real world applications of naive probabilism,
however, pose disproportionate risks which scale exponentially with the stakes, ranging
from harmless (and also helpless) in many academic contexts to destructive in the most
extreme events (war, pandemic). The 2019–2020 coronavirus outbreak (COVID-19) is
a living example of the dire consequences of such probabilistic naiveté. As I write this
on March 13, 2020, we are in the midst of a 6 continent pandemic, the world economy
is collapsing and our future is bound to look very different from the recent past. The
major damage caused by the spread of COVID-19 is attributable to a failure to act and
a refusal to acknowledge what was in plain sight. This shared negligence stems from a
blind reliance on naive probabilism and the denial of basic common sense by global and
local leaders, and many in the general public.

1 Naive probabilism
The naive probabilist believes that any outcome can be assigned a meaningful probability
value, i.e., a number between 0 and 1 which connects with something concrete in the real
world. Such probabilities arise most naturally as a ‘base rate’, i.e., long-run frequency of
a repeatable event or as a proportion in a large collective. For one-off or non-repeatable
events, naive probabilists settle on a subjective ‘degree of belief’, i.e., a value p at which
one is indifferent between buying (respectively, selling) a contract for $p in exchange for
a payment (resp., obligation) of $1 if the outcome occurs.
The naive probabilist is beholden to the view that rational thinking is probability
calculus. The naiveté of this view is readily seen through the lens of a common sense rea-
soning through the risks posed in the early stages of COVID-19. Probability calculations
∗
Rutgers University, Department of Statistics and Biostatistics

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are very precise, and for that reason alone they are also of very limited use. Outside
of gambling and certain financial applications—even these are limited—mathematical
probability is of little direct use for reasoning with uncertainty.
Naive probabilism played a major role in the slow response of many universities to the
COVID outbreak: Stanford waited (patiently) to close campus until a faculty member
contracted the disease, and others followed suit, with most remaining open for more than
a week after the Stanford, citing “no confirmed cases” on their own campuses. University
of Chicago was among the most irresponsible, announcing on March 12 that it would wait
until March 30 to begin remote classes. Perhaps Chicago’s negligence, which puts not
only its students and faculty but the entire population at greater risk, was influenced by
Cass Sunstein, Chicago faculty and unrepentant naive probabilist who chided concerns
over COVID-19 as irrational as late as early March, long after the disease was spreading
like wildfire throughout Italy and Korea, and had already infected several in the USA:

“At this stage, no one can specify the magnitude of the threat from the
coronavirus. But one thing is clear: A lot of people are more scared than
they have any reason to be.”

Sunstein attributes panic over the virus to ‘probability neglect’ (a phony term), which
he defines as the tendency to fixate on very low probability outcomes with sensational
outcomes (good or bad) instead of focusing on what is most likely. With COVID, for
example, focusing on the possibility (small according to Sunstein) of a global pandemic
instead of the more likely (again, according to Sunstein) that the disease is about on par
with the flu, is an example of probability neglect. Fast forward just two weeks, on March
12: COVID-19 was on 6 continents, with thousands (and growing) infected in the USA
and deaths around the world. It was declared a pandemic, pro sports leagues canceled
their seasons and playoffs, the economy was in a downward spiral. According to the
‘experts’ the risk was ‘low’, but the consequences were catastrophic.
Behavioral economists like Sunstein views probability neglect as a cognitive flaw,
which ought to be corrected if possible. But in the situation that was unfolding in late
February—severe uncertainty, uncontrollable spread across all continents, high death
rates, overloaded hospitals—the choice was between probability neglect or neglect of
human life. Probability neglect was perfectly rational. It saved countless lives and delayed
the spread.

2 Three rungs of common sense

Real world problems require more than just thinking in bets. Most common sense is
qualitative, thinking about plausibility and possibility long before precisely quantifying
probabilities of any kind. Even in cases where the probabilities can be quantified, they
should rarely be interpreted literally.
When I gamble, I use probability, first to compute the frequencies of each outcome,
then to decide the odds I’m willing to accept. But even here, it’s a naive view of gam-
bling to think that probability is enough. Probability is just one part of a common sense
approach to gambling. Smart gamblers account for additional uncertainty in their prob-
ability calculations, and hedge using fractional Kelly and other heuristics. The prudent
gambler further protects against the possibility of ruin, avoids overbetting and overex-
tending his bankroll. The gamble is a simple mathematical problem, but the gambler

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is a complex person with a life outside of gambling, a need to maintain a bankroll, pay
a mortgage, raise a family, etc. The gambler’s priorities are the reverse of the naive
probabilist’s caricature of the ‘ideally rational agent’: first, survive (avoid ruin); second,
maintain (avoid loss); third, thrive (win), time permitting.
The same priorities apply, much, much more so, in the case of COVID-19. First,
survive: prepare for the worst case scenario by considering all possibilities. Forget how
‘improbable’ any of them are, prepare for as many as is feasible, within the reasonable lim-
its of time, money and resources. At an individual level, store extra water, non-perishable
food, bullets (dry powder), cash (“dry powder”). At a societal level, do everything possi-
ble to reduce the spread. With COVID-19, as with other epidemics, the replacement rate
R0 (i.e., the average number people infected by each person contracting the disease) is
larger than 1. Early estimates of R0 for COVID-19 range from 2–5, but the exact value
doesn’t matter. Qualitatively, as long as R0 > 1, the spread is super-critical, meaning
that the number of infected is growing exponentially and there is a positive probability
(according to theory) that the disease never dies out. Therefore, in the super-critical
regime, the spreading stops only if (1) it dies on its own (luck) or (2) actions are needed
to bring R0 < 1. Notice that the probability model is valuable not for computing actual
probabilities but from a higher level, to gain heuristic intuition about the large-scale con-
sequences of replacement rate on spread. Regardless of how small the probability of never
dying out may be—in fact the chance is quite substantial at the time of this writing—the
possibility is not something we should entertain. Probability must be neglected to secure
survival.
After shoring up individual and collective survival, only then is it sensible to take
measures to maintain current living standards. Consider the most plausible bad-case
scenarios within the realm of possibilities, and hedge against as many as are reasonable.
One doesn’t hedge against the most likely outcome or against favorable outcomes. One
also doesn’t hedge before taking measures to survive—put the fire out first before running
back into building to save the TV, computer and furniture. The objective function is
asymmetric: protect against catastrophic loss; if possible, protect against any loss.
Only after the foundation has been secured does it make sense to even consider fine
tuning the probabilities, forecasting the outcomes, and trying to actually grow capital
by sharpening the probabilities. To benefit from the crisis of a global disaster is the
lowest of the low priority, and should be saved for the absolute last, if at all. If, however,
we were to bet after the first few people were infected on whether COVID-19 would
(i) become a pandemic, (ii) infect 100,000+ people, (iii) infect 1,000,000+ people, etc.,
then the probability of each would be assessed as very low, and the odds would have
correctly been very long against. (To reiterate from before, the low probability should
not be ignored. When there are only a few cases, there’s a chance, maybe even a very
high chance, that it dies out on its own, but even at such an early stage, serious efforts
should be taken to stop the spread. With each new infection, the chance of dying out
decays geometrically, requiring more and more disproportionate actions to achieve the
same result.)
Importantly, the fact that the ‘chance’ of pandemic may have once been judged to be
low has nothing to do with the specific virus COVID-19 and everything to do with our
ignorance about it, both at the very beginning and even today. At such an early stage, we
know almost nothing about it, causing us to lump it in with all the other outbreaks that
happen numerous times every year, of which a remote few ever pose a serious public health
threat, and an even more remote few pose a global threat. Though a perfectly reasonable

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way to price bets, the tendency to manufacture ignorance into knowledge combined with
misguided comparisons to the flu and foolish lecturing to avoid stereotypes about who
may or may not be sick distracts from the first two collective and individual priorities
to survive and maintain. Under the ideal outcome, where everything is hedged and
protected, incorrect assumptions are tolerable: they cost money, but not lives. But the
situation gets out of control, these assumptions cost lives, and a lot more. In the case of
COVID-19, naiveté distracted away from the major threat, not to P&L, but to the way
of life, and even existence as we know it.
I’m writing this on March 13, 2020, in the midst of the outbreak in the United States.
Schools are closing, people are working from home, sporting events have been canceled
indefinitely. Time will tell how it all ends. If it ends well, or at least well enough, let’s
make sure not to be naive the next time around, about the risks posed by the threat (be
it a virus, a war, or a new technology) and the risks of naive probabilism.