Mullainathan: High-fidelity articulation of others' views reveals arbitrage opportunities
Sendhil Mullainathan · #102 Sendhil Mullainathan: The Chaos Inside Us · Feb 2, 2021 · at 1:25:13
Behavioral scientist Sendhil Mullainathan explains how deeply modeling the perspectives of other market participants reveals overlooked opportunities.
0:00 / 0:30exact quote · 30.4s
720p mp4 · rendered on demand · StarZero watermark
“If you can describe someone else's perspective on a problem so well that they themselves say, oh yeah, that is what I'm thinking. Then, you know, you have an arbitrage opportunity because you've said it as well as they have, and yet you see something they don't see. So it's like a really useful challenge to set to oneself, not to articulate what you believe, But to articulate what other market participants believe with such high fidelity that they would agree with you. That's when you know that you found an arbitrage opportunity.”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from Sendhil Mullainathan
Mullainathan: Overfitting is a necessary first stage of learning
“I think the first stage of learning is overfitting.”
Mullainathan: People mistakenly assign profound meaning to random neurological noise
“I think this is this crazy view we have of the brain is that like, we know that we belch and fart, and we don't attribute deep meaning to belches or farts. But the same belches and farts produced by the firing of our neurons are like, oh, I thought about that.…”
Mullainathan: Academic psychology will inevitably pivot toward applied self-help
“I think we're going to see a revolution both in behavioral science as a research discipline. So for example, here's a telltale sign. Psychologists don't work on self-help. That doesn't make any sense. There's a whole ocean of people who in good faith want to i…”
Mullainathan: Algorithmic feedback avoids the personal sting of human judgment
“So I actually think that the advantage of the algorithm over the person is what you said, which is that once you get used to it, you know, even your friend, when you told him this fact, partly he must have, however nicely you said it, felt the sting of judgmen…”
Mullainathan: Academia mistakenly views knowledge flow as purely one-way
“I think academia has this illusion that it can, it's going this way as the only
Force, but there's a strong feedback loop.”
Mullainathan: Creativity requires marrying opposing processes of ideation and filtration
“Which is, I think a lot of people forget that creativity is the marrying of ideation and filtration. That you need the capacity to generate ideas, but you also need the capacity to filter ideas. And these processes are in such fundamental opposition.”