#43 Risks and Uncertainty: Understanding Data and Making Rational Decisions feat. Gerd Gigerenzer

Machine learning and big data are becoming increasingly important, and some say they can make predictions more accurate than ever before. But as risk expert Gerd Gigerenzer explained in his book Risk Savvy, the surprising truth is that we often get better results by using simple rules and considering less information in the real world.

In this episode, Gerd reveals concepts behind Risk Savvy and how misunderstanding statistics leaves us misinformed and vulnerable to exploitation. He explains how to make better decisions for our health, finances, and family, without the aid of an expert or supercomputer. Join him and Greg as they tackle the Turkey Illusion, Illusion of Certainty, and his other books Simple Heuristic and Ecological Rationality.

Time Code Guide:

00:01:42 Judgement and decision-making
00:02:58 Benefits and complexities of machine learning
00:06:54 Thoughts on lack of computational resources and cognitive limitations
00:12:26 Human heuristics and machine learning application
00:14:00 How the environment impacts decision-making
00:15:00 The Turkey Illusion
00:20:11 Investing and some concepts from the book Ecological Rationality
00:22:51 Positive error culture
00:25:57 Illusion of Certainty
00:28:54 Basing inference, conditional probabilities, understanding confusion, matrices, false positives and false negatives
00:32:29 How can experts like doctors process data better
00:34:22 Additive risk increases and absolute risk increases
00:36:28 Striking a balance between people thinking for themselves and trusting experts
00:42:37 How can young people learn statistics in fun and applicable ways

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