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Technically, having biased information can't be worse than having no information (i.e. you can choose to ignore it if you know it is biased and you can try figu
by mehrdada 11y ago
Technically, having biased information can't be worse than having no information (i.e. you can choose to ignore it if you know it is biased and you can try figuring out how and in what direction it is biased).
What's worse in this scenario is not the information itself, but incorrectly assuming the information is unbiased.
- danieltillett 11y agoOnly if you know the direction it is biased. If you don’t know this then you are just a sucker in someone else game. Imagine a coin tossing game where I know the result of a toss and you don’t, but where I can set the size of the bets. Every time you choose correctly I set the bet low and every time you choose incorrectly I set the bet high. It won’t take me long to completely fleece you despite the odds of you and me being right being 50/50 each time. This is a simple analogy of betting against a hedge fund when you only have access to biased information of their strategy and they know this and can use it to induce you to bet high on a losing bet.