Some (Very) Practical Problems with Probability

Nassim Nicholas Taleb examines three technical problems in applied probability. First, he considers how errors in probabilities derived from fat-tailed survival functions can translate into disproportionately large, potentially unbounded errors in thresholds. He relates this to uncertainty in disease growth rates and forecasting.

Second, he discusses what he regards as fundamental probability errors in psychology papers. Third, he examines how correlation and relative distances can mislead in the geometry of information, proposing heuristics for applying entropy-based methods to genetic distances. The lecture connects these examples through the consequences of using probabilistic quantities outside the conditions under which they are informative.