If you’ve been a reader of Safalniveshak for sometime you’d already be familiar with the game of Russian Roulette. For those who aren’t, here’s a quick explanation.

In fact I’ll let Nassim Taleb, author of Fooled By Randomness, do the explaining –

Imagine you are offered $10 million to play Russian roulette, i.e., to put a revolver containing one bullet in the six available chambers to your head and pull the trigger. Each realisation would count as one history, for a total of six possible histories of equal probabilities. Five out of these six histories would lead to enrichment; one would lead to a statistic, that is, an obituary with an embarrassing (but certainly original) cause of death.

[Read more…] about Behaviouronomics: How to Win Russian Roulette

Yogi Berra famously said, “In theory there is no difference between theory and practice, but in practice there is.”

Whenever one starts learning about a new field of knowledge or begins acquiring a new skill, the first confusion is always this — what’s the right combination of theory and practice?

You can devour a hundred books on swimming but nothing happens until you jump in the water. At the same time, just splashing around won’t get you anywhere unless you know the theory about how humans swim, how to move in the right way.

We’ve all acquired many skills over our life time. Some basic skills like speaking and walking are either biological or a product of our environment. Other skills which might have looked impossible for pre-historic man — like reading, writing, cycling, driving — are also so common today that we rarely pause to deconstruct how we acquired those skills.

[Read more…] about Behaviouronomics: On Intelligence

As the second wave of Coronavirus is sweeping across our country, it has left many perplexed. With more than 6.5 crore people vaccinated and the new normal of masks and sanitizers, why does the pandemic seem to be taking a U-turn?

I recently saw a news about a doctor lamenting, “I treated thousands of patients with Covid 19 for the last several months and never caught the infection. But within days of taking the vaccine, I became positive.”

How come? Is vaccine reducing the immunity? That’s absurd.

Well, we have a behavioural bias to explain the phenomenon and it’s called the Peltzman Effect. But before I get into that, here’s an interesting trivia —

Statistics reveal that even though skydiving equipment has made huge leaps forward for improving reliability, the fatality rate has stayed roughly constant when adjusted for the increasing number of participants.

Think about that for a minute and see if you can come up with an explanation.

[Read more…] about Behaviouronomics: Of Parachutes, Road Safety, and the Second Wave