This week on our Masters in Business podcast, we speak with Philip Tetlock, Professor at the University of Pennsylvania, where he is cross-appointed at Wharton School / School of Arts and Sciences.
Tetlock is the author of the award winning: Expert Political Judgment: How Good Is It? How Can We Know? which won the Grawemeyer Award (for Ideas Improving World Order), Woodrow Wilson Foundation Award, and the Robert E. Lane Award. He is most recently the co-author of Superforecasting: The Art and Science of Prediction, which the Economist named to its Best Book of 2015 list
He is also the co-principal investigator of The Good Judgment Project, a multi-year study improving the accuracy of probability judgments of high-stakes, real-world events.
Professor Tetlock has spent his entire career researching how people make decisions, especially those inclined to make pronunciations about the future. In the podcast, we discuss the people who make prediction their business — who appear as experts on TV, get quoted in newspaper articles, advise governments and businesses — and why they are no better than the general public at forecasting future events.
As it turns out, there are ways to improve your ability to make probabilistic guesses about the future. The author discovered that “Teams of ordinary forecasters beat the wisdom of the crowd by about 10%; Prediction markets beat ordinary teams by about 20%; And superteams beat prediction markets by 15% to 30%.” This leads to numerous insights into ways to improve your forecasting skills. Tetlock notes that “the more degrees of uncertainty you can distinguish, the better a forecaster you are likely to be.”