Probability: real vs observed

Self-tutoring about probability: the tutor gets (perhaps) philosophical as well.

Is the real probability of an event calculable from theory?

First, let’s imagine tossing a coin. Theoretically, its probability of heads is 0.5 – tails, also 0.5.

Let’s say you perform 1000 coin tosses and observe 460 heads and 540 tails. Would you still believe that the probability of heads is 0.5?

The point: some people only trust experience, when they have it. Experience may not necessarily be direct, but rather based on someone else’s they know, or even a synthesis of indirect experiences. If I can reach Person X, they’ll know what to do — they’ve never failed me. Even in a completely new situation, they will trust Person X, given how helpful they’ve been in other situations.

How people compute probabilities – even being totally unaware they’re doing so – can make one’s choices different from another’s. You see the choices, but the decision process behind them can be very subtle.

With the world changing so quickly, it can be harder and harder to trust reasoning, or “theoretical” probability, since the factors involved constantly change. I would have said oil at a negative price was impossible, but it happened. More and more impossible things seem to happen; perhaps as a result, I sense that many people are becoming even less theoretical in how they determine probabilities, even with so much more information seemingly available.

Source:

marketwatch.com

Jack of Oracle Tutoring by Jack and Diane, Campbell River, BC.

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