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Monty Hall Problem
Do you know about the Monty Hall Problem?
If you deal with data, statistics and probabilities...it's worth taking a few minutes to understand the Monty Hall Problem and how restricted choice can create bias in your results.
This bias was so strong and at the same time so subtle that famous behavioral scientists have fallen prey to it. Perhaps one of the greatest examples is the Hot Hand Fallacy.
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38 reads
Restricted Choice
The Monty Hall Problem is based on an old TV Game Show.
You choose one door. The host gets the other two. One door has a prize, the other two have nothing.
The host has a 100% chance of getting 1 door with no prize.
He has a 66% chance of getting 1 door with a prize
He has a 33% chance of getting 2 doors with no prize
___________________________________________
You have a 33% chance of getting a prize with your initial selection
You have a 66% chance of getting no prize with your initial selection
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50 reads
A mental trick!
After he reveals to you that one of his door has no prize...he offers to switch your door for his.
Should you?
Our initial assumption is that now there are two doors.
You have a 50% chance...he has a 50% chance...
Right?
WRONG!
When working with restricted choice...you must adjust the probabilities to reflect restricted choice.
Remember the initial probabilities.
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48 reads
Switch!
Because the host has played his no prize door...restricted choice principle states that the likelihood that his other door has no prize is now decreased.
Remember the intial probabilities have not changed. The doors weren't reshuffled.
You still picked a door with a 66% chance of it being a dud.
He picked 2 doors giving him a 66% chance of having the prize.
You should switch!
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61 reads
What's the take?
Many studies are made with large datasets which then have a subset of data collected from it.
When making decisions based on these studies...it's worth asking yourself if the possibility of a restricted choice or Monty Hall Problem may have created bias in the results.
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32 reads
CURATED BY
Interest in Programming, Data Science and Investments. Love discussing economics and behavioral psychology.
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