Monday, January 12, 2009

Is Your Misunderstanding, Apathy or Ignorance of Math Costing You?

Misunderstanding, apathy and plan old ignorance of math can cost you money. It leads to millions of dollars spent on psychics and other shams. I've found some very interesting links to help you understand probabilities.

The Power of Coincidence: Some Notes on "Psychic" Predictions

This article by Robert Novella does a great job explaining probabilities. Here is an excerpt:

For example, what are the odds of two people sharing the same birthday in a room containing twenty three people? Many people I have spoken with say it must be one in thirty or more. Surprisingly to most people, it is only one in two [1]. Not knowing this sort of thing has caused many people to conclude that since their experience seemed so unlikely, perhaps they share some special link or that a supernatural force brought them together.

Some examples of coincidence I've read about are pretty interesting. For example, when someone is thinking of a particular friend then that friend calls them on the phone, they may think: "Wow, I must have had a premonition" or "I'm psychic." The reality is we fail to count all the times when we were thinking about that friend and they didn't call. Another example from my personal experience is prayer. When I used to pray and that prayer came true, I thought "cool, god is listening." What I eventually figured out is that nothing happened almost every time I prayed and when something did happen it was coincidence.

Cold reading is something I've covered in this post. This understanding of counting the hits and forgetting the misses is essential for the flim flammers who sell you their services.

The Law of Truly Large Numbers is explained pretty well at the Skeptics Dictionary. This Wikipedia version is kind of short but sweet. For even more, go learn about the Law of Large Numbers and the Law of Small Numbers. Then start counting the misses.

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