3 ms·
> A 50% chance of winning $50 million would equate to an expected value of $25 million. No it doesn't. Statistics is the science of populations of events, exp
by kwhitefoot 4y ago
> A 50% chance of winning $50 million would equate to an expected value of $25 million.
No it doesn't. Statistics is the science of populations of events, expected value applies only if you have a sufficiently large population.
- synu 4y agoI see this is being downvoted for some reason, but I have the same question. I get that if you keep replaying the game the expected value materialises over averages, but if you have one chance it doesn’t sound right that you should expect 25M if the two outcomes are zero or 50M? And that this is so true and obvious that it is dumb to take the 1M?
- shapefrog 4y agoSchrodingers cat is half alive.
- BeetleB 4y agoIt is the expected value if multiple people play the game. As I posted in another comment: There are 20 people in line ahead of you. Each one of them hits the green button, and you physically see that half of them made $25 million. Would you not be tempted to hit the green button?
- kwhitefoot 4y agoNo because each event is independent.
- stale2002 4y agoBut the point is, that we can collect data, based on the information that we observed. The fact that we observed this data, means that this would effect our estimation of the situation.
- kwhitefoot 4y agoOnly if you have reason to believe that the events are not independent. And anyway the way the original scenario is phrased suggests that it is a one off.
- deleted 4y ago[deleted]
- BeetleB 4y agoFair enough. What if you had a 80% chance instead of a 50% chance? 90% chance? I'm sure at some probability before 100% you'd be willing to take that chance.