Or, how to recognize Bayes' theorem when you meet one making small talk at a cocktail party.

Knowing the theory of rationality is good, but it is of little use unless we know how to apply it. Unfortunately, humans tend to be poor at applying raw theory, instead needing several examples before it becomes instinctive. I found some very useful examples in the book Reading People: How to Understand People and Predict Their Behavior - Anytime, Anyplace. While I didn't think that it communicated the skill of actually reading people very well, I did notice that it did have one chapter (titled "Discovering Patterns: Learning to See the Forest, Not Just the Trees") that could almost have been a collection of Less Wrong posts. It also serves as an excellent example of applying Bayes' theorem in every-day life.

In "What is Bayesianism?" I said that the first core tenet of Bayesianism is "Any given observation has many different possible causes". Reading People says:

If this book could deliver but one message, it would be that to read people effectively you must gather enough information about them to establish a consistent pattern. Without that pattern, your conclusions will be about as reliable as a tarot card reading.

In fact, the author is saying that Bayes' theorem applies when you're trying to read people (if this is not immediately obvious, just keep reading). Any particular piece of evidence about a person could have various causes. For example, in a later chapter we are offered a list of possible reasons for why someone may have dressed inappropriately for an occasion. They might (1) be seeking attention, (2) lack common sense, (3) be self-centered and insensitive to others, (4) be trying to show that they are spontaneous, rebellious, or noncomformists and don't care what other people think, (5) not have been taught how to dress and act appropriately, (6) be trying to imitate someone they admire, (7) value comfort and convenience over all else, or (8) simply not have the right attire for the occasion.

Similarly, very short hair on a man might indicate that he (1) is in the military, or was at some point in his life, (2) works for an organization that demands very short hair, such as a police force or fire department, (3) is trendy, artistic or rebellious, (4) is conservative, (5) is undergoing or recovering from a medical treatment, (6) thinks he looks better with short hair, (7) plays sports, or (8) keeps his hair short for practical reasons.

So much for reading people being easy. This, again, is the essence of Bayes' theorem: even though somebody being in the military might almost certainly mean that they'd have short hair, them having a short hair does not necessarily mean that they are in the military. On the other hand, if someone has short hair, is clearly knowledgeable about weapons and tactics, displays a no-nonsense attitude, is in good shape, and has a very Spartan home... well, though it's still not for certain, it seems likely to me that of all the people having all of these attributes, quite a few of them are in the military or in similar occupations.