Michael G Titelbaum at Psyche:
One of the most important conceptual developments of the past few decades is the realisation that belief comes in degrees. We don’t just believe something or not: much of our thinking, and decision-making, is driven by varying levels of confidence. These confidence levels can be measured as probabilities, on a scale from zero to 100 per cent. When I invest the money I’ve saved for my children’s education, it’s an oversimplification to focus on questions like: ‘Do I believe that stocks will outperform bonds over the next decade, or not?’ I can’t possibly know that. But I can try to assign educated probability estimates to each of those possible outcomes, and balance my portfolio in light of those estimates.
We know from many years of studies that reasoning with probabilities is hard. Most of us are raised to reason in all-or-nothing terms. We’re quite capable of expressing intermediate degrees of confidence about events (quick: how confident are you that a Democrat will win the next presidential election?), but we’re very bad at reasoning with those probabilities. Over and over, studies have revealed systematic errors in ordinary people’s probabilistic thinking.
Luckily, there once lived a guy named the Reverend Thomas Bayes.
More here.