The Importance of Probabilities

To understand efficient precautions, you first need to understand the idea of an expected benefit. This is not difficult since we actually use this idea all the time in our daily lives. Consider this example.

You want two incompatible things: you want to go to law school in the Fall, and you also want to retire to the woods in the Fall and write your first novel and have it be a great success. You want to be a successful novelist much more than you want to graduate from law school. Your only problem is that you know you really have no literary talent at all, and that it is very unlikely that you would succeed in writing a successful novel; on the other hand, you have all the skills necessary to do well in law school, and it is highly likely that you will not only graduate, but graduate with honors. To make a rational decision about whether to go to law school or try to write the novel, you would

(a) ignore the probability that you will fail as a novelist and succeed as a law student.

(b) take into account the probability that you will fail as a novelist and succeed as a law student.