Statistics 2037 - Chapter 18 When Intuition Differs From Relative Frequency.docx

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Department
Statistical Sciences
Course
Statistical Sciences 2037A/B
Professor
Emad Mohammad
Semester
Fall

Description
Chapter 18 – When Intuition Differs From Relative Frequency People ignore relative frequency sometimes. People think coincidences have a low probability of occurring. Intuition causes us to think this. A coincidence is a surprising concurrence of events, perceived as meaning fully related, with no apparent causal connection. Many people think that coincidences are very improbable. The truth is that someone, somewhere, someday will experience one. It is not unlikely that something surprising will happen. The misconception that long-run frequency should apply in the short run. This is gambler’s fallacy. The belief in the law of small numbers is that small samples are highly representative of the population. nd Example: HHHTTT vs. HTHHTT, both are equal probability, but the 2 seems more probable, coin is fair so each has equal probability. The gambler’s fallacy leads to poor decision making. Independent chance events do not affect the probability of another event. Example: gambling – string of luck isn’t followed by a string of bad luck. The gambler’s fallacy only applies to independent events. It does not occur when one event affects the probability of anoth
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