Why the odds are never in your favour
Posted on Friday, September 1, 2017 by Venn Group — No comments
The application of simple statistics in most walks of life is never utilised well enough in the day to day, and yet everyone deals with stats on a daily basis, knowingly or not.
Whether you use statistics at work, in sports or in gambling, the risks are certainly something that most over look. In industries where KPI's and targets are becoming more and more defined, it's probably time to pay attention to the statistics.
In and amongst every office, there are always the 'certified gamblers'; they come in all forms and sorts, and work at various different levels in the company. The lion share of these gamblers though are out and out losers; the simple reason being, that they do not understand statistics or make ill use of information supplied, and are therefore ultimately giving money away.
So, how well do you understand the maths?
If I were to toss 2 coins and show you neither result, but told you one coin has landed on heads; what is the chance the other coin also landed on heads?
The answer is A:33%
Assuming you said 50%.
I know, coins have 2 sides and the flips are independent of each other. However, you overlooked one vital piece of information; if you flip 2 coins, there are only 4 possible outcomes;
HH - 25%
HT - 25%
TH - 25%
TT - 25%
Having told you one of the two coins landed on heads, this immediately takes away the 4th outcome of TT. Leaving the following;
HH – 33%
HT – 33%
TH – 33%
For the other coin to be land on a head, there is only one possible outcome, HH. In other words, 33%.
Admittedly this doesn't have much to do with your weekend football accumulator, but you can bet your mortgage that the companies you gamble with understand all the information given and make a living out of your misinterpretation. The house really does always win.
So, next time you take a risk of any kind, make sure you understand the maths.
And if you still can't make sense of the above and just like a punt. It's probably best you stop gambling. Immediately.
Toby Rose, Venn Group