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As a professor of statistics at the University of Toronto, Jeffrey Rosenthal has delved deep into the mathematical sciences. He recently wrote Struck by Lightning: The Curious World of Probabilities, on how understanding reasoning and the random wonders of probability can help you make better decisions.
Entrepreneur: How can entrepreneurs use probability to make decisions?
Jeffrey Rosenthal: In the book, I mention a restaurateur using utility function to make decisions. How many staff should he hire for a Saturday night? If he only has one waiter and many customers, there's a negative utility, because customers will be unsatisfied. If he has too many workers, he has to pay for [overstaffing]. By giving each factor a numerical rating on how good or bad the result would be, and the likelihood it will occur, you can see the safest decision with the least negative outcome.
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