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The Wotton's Society

Thursday 17th january

 

In an exciting and enjoyable talk, Dr. Evans began by introducing the philosophy of gambling otherwise known as risk intelligence.  Gambling may have had a bad press, but that can be explained culturally since gambling was using a divine process for a more commercial capitalistic process. Indeed as time has gone on we have slowly lost our opposition to gambling as gambling continues to show its social purpose.

Through Galileo the study of gambling led to the discovery of statistical and probability theories. Though it is strange to think that statistics was only discovered 300 years ago despite the vast economic incentive otherwise.

Statistical and probability theories are now at the stage of game theory. Game theory boils the very existence of decision making down to gambling. The way you bet in a casino ought to be the same way you take decisions in life: you multiply outcome by probability. Therefore Dr. Evans argued that in order to understand how we make everyday decisions, we should study expert gamblers. If we study a gambler with $600 million profit we can work out the optimal strategy to live our own lives. This anonymous gambler used the then new computer power to crunch the data on the Hong Kong horse market. Spending a year and a half, and using past performance as an indicator of future performance he made $65m in a single year.

Similarly we should also approach our day to day decisions scientifically. Over time as we take more and more of these decisions we gather more and more data thus our mind calibrates, thereby improving our risk intelligence. This technique can even be applied to the romantic notions of marriage and relationships. Dr. Evans suggested that perhaps rather than falling head over heels we should weigh the pros and cons of prospective partners and their respective probabilities.

Admittedly difficulties are introduced when there are unknown unknowns. How do you quantify the stuff you that you don’t know? But then again Machiavelli’s ‘fortuna’ can strike at any point. How do you know the roulette wheel is even for example?

But despite these difficulties, statistics will take over more and more of everyday life. From baseball to gambling: ‘the geek will inherit the earth.'

Fred Robson (TEJN)

Date Posted: 01 February 2013
2013

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