Sunday, December 31, 2023

Area effects

In this piece, I'll go over some thoughts around area effects.

To me, they seem understudied. I think it's the sort of thing that makes "common sense", but not sense to people more used to actively model the world. 

Let's start with a story to illustrate what I mean by area effects. I grew up in a suburb of single family houses. In that neighbourhood, there used to be a cat, a single black cat called Licorice. At one point, Licorice died of old age. What we saw in the following months was that our garages would get invaded my mice, and perhaps also rats. The mice eventually became fatter and fatter and would hardly even bother to scurry away quickly when a person approached. In the end, another neighbour got a new cat called Elsa. Right away, the mice disappeared. The drastic change in number of mice seemed disproportionate to me, for just the difference of one cat. Then I realized that the cat was actually 'killing' more mice than it ate since it was constantly denying the mice the opportunity to forage. Since a cat could come around at any time, it was never safe to be a mouse in the neighbourhood anymore, and the mice starved.

Let's talk terrorism. During the attacks of 2015 to 2017, they killed in total about 200 in Europe. Media and governments were reacting like World War III. At that point I was thinking "Why are people freaking out? They can't kill all of us, they can even make a dent of a dent in the population". Surely some of this fear was due to cognitive availability bias. Getting killed in an attack felt very likely because a Dunbar number of people had been killed and we had heard about all of them. Also being unable to take in just how many people 500 million people really are. But the widespread fear wouldn't have been possible if the victims hadn't been chosen at random. If they had only targeted satiric cartoonists, almost no-one would have felt a personal fear. 

Same thing with Covid. The widespread panic definitely died down when it became clear that unless you had a preexisting health condition, Covid for you would be a heavy cold and that would be that. 

There is a kind of risk calculation everyone does. I'll repeat an idea from Taleb here. The ensemble probability is not the same as the time probability in the presence of irreversible events. Let's break that down. An irreversible event to a person would be death. To a company or state, being dissolved is usually irreversible. To someone in certain positions of power, losing that power is irreversible. 

What about ensemble average? Let's take Covid again. You take 100 people, they all get Covid. Mortality rate is about 1%, so one of them dies. Seems like okay odds, right?

Of course not. That's not the calculation people make, not intuitively. For that, you have to imagine one person, being subjected to something as dangerous as Covid, several times over their life. On average, a person will survive 100 such events. After 70 such events, they have a 50/50 chance of being dead. So it seems like taking such a risk about once per year wouldn't make the average lifespan of an adult much shorter. However, it's not a psychologically implementable rule to say "I'll only take 1% risks once per year". It's too easy to lose track of how often you take the 1% risks. Internally this will have to be implemented as never deliberately taking a 1% risk, and only taking it in the face of an even bigger risk to yourself or someone close to you. So something that has a chance of killing a random 1% of the population will cause huge disruptions as people try to avoid it at all costs. 

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