Tuesday, February 18, 2020
More nonsense about random sequences
BBC tries to deal with the contrast between mathematical random and human random. Specifically they're talking about the tendency to bet against a streak.
This isn't a math error. It's natural, and in most situations it's a valid response to reality. It's only a counterproductive fallacy when the events are TRULY mathematically random, like the numbers in a lottery. (I was going to list some other examples like the pennies of a stock price, but lottery numbers are the ONLY common example. Stock prices are rigorously controlled down to the femtopenny by HST. Every microvariation is designed to benefit somebody, and it ain't you.)
When a streak or run happens in a natural or human-controlled sequence, it's NOT just part of randomness. It's meaningful. We should recognize it as a trend or phase, and in fact we usually do.
Here's a situation where betting against a streak is a VALID response:
One team of researchers recently analysed US judges’ decisions on whether or not to grant asylum to refugees. Logically speaking, the ordering of the cases should not matter. But in line with the gambler’s fallacy, the team found that the judges were up to 5.5% less likely to grant a case if they had granted the two previous cases – a serious decline from the average acceptance rate of 29%. Consciously or not, they seemed to think that the chances of having the same judgement three times in a row was just too small, and so they were more inclined to break the streak. The researchers next analysed bank staff considering loan applications. Once again, the order of the applications made a difference: the loan officers were up to 8% more likely to reject an application after they had already accepted two or more in a row – and vice versa.Both of these are HUMAN-CONTROLLED sequences where we KNOW that organizations are at work. When you receive a dozen asylum or loan applications that look similar, the applications are NOT random. They were created by an NGO, a "human rights" organization attempting to storm the gates. The technique is well known by front-line agents who handle such applications. Breaking the storm is a correct and PRODUCTIVE response.
Labels: Real World Math
¶ 12:10 AM
