Oct 05 2015
There is a general consensus that people overall do not have a good intuitive grasp of statistics. In addition, there are multiple biases filtering our perception and memory. Therefore we tend to engage in a biased evaluation of biased data. The entire gambling industry depends on this fact.
As an example, consider the famous Monty Hall problem. In the classic game show, Let’s Make a Deal, the host Monty Hall would often show three doors to the contestant. In this problem Monty Hall says that behind two of the doors there are goats and behind one there is a new car. The contestant chooses one of the three doors. Monty (who knows where the car is) then opens one of the doors the contestant did not choose to reveal one of the two goats. He then offers the contestant the opportunity to change their pick to the other remaining door. Should they switch?
The answer is unequivocally yes. Yet many people have a very difficult time grasping the statistics behind the explanation. In fact, statistics can be so counter-intuitive that the world’s psychology researchers may in fact perpetuate an error for thirty years before someone realizes it. That is what two researchers (Miller and Sanjurjo) are now claiming.