So, I know many of us

have thought this

or have heard these

kind of opinions and I understand

that given that way

we often teach probability

that people can think of this

or can think of probability this way.

Now, instead I really want you

to get excited

about probabilistic thinking

and I wanna show you

many cool applications

of probability and other applications

of probability in everyday life.

Let’s think about this,

how often do you see

probabilities in your life?

This morning,

I checked the weather forecast

and it said, today,

there is a 40% chance

of rain here in Zurich

and Switzerland.

40%, there was already

my first probability.

How should I think about it?

Should I trust that probability?

How should I react on this probability?

Last year,

I had a surgery and afterwards

my surgeon told me,

Karl, as a result of your condition,

your probability of getting cancer

is tenfold, but don’t worry,

it’s still small.

How should I feel about this?

How should this affect my lifestyle?

How large is 10 times larger

than for the rest of you?

Another very important question

that essentially

goes back to probability.

This past summer 2016,

there was the infamous Brexit vote

in the United Kingdom.

In the weeks leading up to the vote,

you read the newspapers.

Oh, the Brexit is becoming more likely.

Oh, it’s less likely.

Oh, the stock market

thinks the probability is this much.

Or the opinion poll says

the probability of a Brexit

is shrinking.

Another very important

public policy issue

where probabilities

were talked about over and over

in the weeks running up to the vote.

Those of you

who have flown in the past

or have been on the airplanes,

you may have noticed

that the airlines

overbook their flights.

They sell 400 tickets

even though they only have 300 seats

on an airplane.

Why are they doing it?

I will explain to you

how simple probabilistic thinking

is behind the airline’s behavior.

Those of you who invest money

in the stock or bond market

or a new ventures,

may have thought about

how risky is this investment?

Again, that’s a probabilistic concept,

the riskiness or volatility

and we will talk about

metrics that describe this.