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From: Gareth Henson <>
Subject: Re: [DNA] Odds Are, It's Wrong - 5% of the time
Date: Fri, 19 Nov 2010 23:56:12 +0000
References: <F9C440A2-FC59-4A9E-AAAC-85DEE9D2FAB0@GMAIL.COM>,<COL115-W50D879F102DC3996D9D454A03A0@phx.gbl>
In-Reply-To: <COL115-W50D879F102DC3996D9D454A03A0@phx.gbl>


Uh-oh - classic gambling fallacies.

If you've lost twice already then the odds of losing three times in a row are just the odds of losing the third time. It doesn't get better the more you lose.
And a double or nothing strategy works in favour of the party who has the last word on whether betting continues or not i.e. the bookmakers & casinos.




> From:
> To:
> Date: Fri, 19 Nov 2010 17:36:31 -0600
> Subject: Re: [DNA] Odds Are, It's Wrong - 5% of the time
>
>
> The headline should have read:
>
> "Tom Sigfried fails to display any real understanding of statistics."
>
> 95% confidence interval means that you have a 1 in 20 chance of being wrong. If that isn't good enough for your purposes, then use a broader confidence interval, say 99.7% (3 sigmas). There's no mystery here.
>
> A steroids test that misidentifies 5% of the time is a bad test. Don't use it. However, if I have a 19 out of 20 chance of winning a bet, I'll take it. If I lose, I'll do it again double or nothing. Then the odds are now .05 *.05 that I will lose, or .0025. Third times a charm! Double or nothing at .05*.05*.05=.000125, or .0125% chance I'm wrong; about one chance in a thousand that I will lose three times in a row. I'll take those odds any time.
>
> Now, if I had a only 95% chance of making it home in my car tonight (5% chance of a fatal accident) I would probably consider postponing the trip to a more favorable time. :-) It all depends on your needs.
>
>
> >
> > Odds Are, It's Wrong: Science fails to face the shortcomings of statistics
> > By Tom Siegfried
> > Science News, March 27th, 2010; Vol.177 #7
> > http://www.sciencenews.org/view/feature/id/57091/title/Odds_Are,_Its_Wrong




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