Finance professor, Alex Edmans, discusses combating misinformation in a post-truth world, the role of statistical significance, financial incentives driving misinformation, critical thinking, peer review in academic research, and the ladder of mis-inference.
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insights INSIGHT
Post-Truth and Inference
Post-truth doesn't just mean whether something is true or false.
It also applies to misleading inferences drawn from true facts, like cherry-picked examples.
question_answer ANECDOTE
Start With Why Example
Simon Sinek's "Start With Why" claims Apple's success stems from its "why".
This uses one successful example while ignoring potentially hundreds of companies with a "why" that failed.
insights INSIGHT
Precision vs. Usefulness
There's a trade-off between making precise claims and avoiding any claims at all.
Statistical significance helps guide us, but it's rarely absolute, especially in social sciences.
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Welcome to episode #941 of Six Pixels of Separation - The ThinkersOne Podcast.
Here it is: Six Pixels of Separation - The ThinkersOne Podcast - Episode #941. He is a finance professor at London Business School, and Alex Edmans knows his stuff. With a background that spans Morgan Stanley and a PhD from MIT, Alex's insights on corporate finance, responsible business, and behavioral finance are top-notch. He's a TED talk star, with millions of views, and his research has been featured everywhere from the World Economic Forum to the UK Parliament. In our conversation, Alex dives into his latest book, May Contain Lies - How Stories, Statistics, and Studies Exploit Our Biases – And What We Can Do About It (he is also the author of Grow The Pie and Principles of Corporate Finance). We explore the tricky terrain of our post-truth world and the fine line between fact and fiction and conspiracy theories. Alex breaks down the role of statistical significance and why simple messages can be so appealing — and misleading. It's not just about the facts... it's about how they get twisted. We also tackle the financial incentives that drive misinformation. Alex is big on critical thinking and urges us all to look beyond the surface. He explains the ladder of mis-inference, making it clear why we need to understand the differences between statements, facts, data, and evidence. We get into the weeds about peer review in academic research and the biases that can creep in. Alex talks about the internet's role in spreading misinformation and how social media can create echo chambers. He’s all about teaching critical thinking early and often. I loved reading May Contain Lies... and it really is more than just a book - it's a guide to navigating the murky waters of modern information. Alex uses real-world examples to show how biases distort our views and decision-making. He offers practical tips to cut through the noise and think smarter. So, if you're tired of being misled and want to make better decisions (and, who isn’t always fooled by “facts”?), take a listen. Enjoy the conversation...
This week's music: David Usher 'St. Lawrence River'.
Takeaways
The concept of a post-truth world goes beyond the question of whether something is factually true or not. It also includes the potential for misleading inferences drawn from accurate information.
Statistical significance can help evaluate the reliability of claims, but it is important to consider the broader context and potential biases in interpreting the results.
Simplistic messages that align with people's pre-existing views are more likely to be accepted and shared, even if they lack scientific rigor or evidence.
The prevalence of misinformation is driven by financial incentives and the desire for quick fixes and easy solutions.
While misinformation poses challenges, there are also opportunities for more nuanced and informed discussions, particularly among open-minded individuals who value scientific consensus.
AI can be both a solution and a problem in addressing misinformation, as it can help identify scientific consensus but also be used to spread false information.
Peer review is a useful but imperfect process for evaluating the accuracy and quality of academic research.
Being discerning consumers of information requires recognizing our own biases and questioning the validity of statements, facts, data, and evidence.
Teaching critical thinking from a young age is essential to combat misinformation and make informed decisions.
Being discerning does not mean being overly suspicious, but rather applying critical thinking to important decisions and recognizing the limitations of evidence.
Chapters:
00:00 - Introduction to Alex Edmans.
07:17 - The Desire for Black and White Rules.
15:31 - The Incentives for Producing and Consuming Misinformation.
Six Pixels of Separation Podcast 