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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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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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

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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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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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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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RELATED IDEAS

We liken success to sports, exams or battles that have winners and losers, and that have an end. **However, success means having the stamina to keep going.**

There might be many people who are more talented than you are. What will make you successful in starting a business, building a popular blog or writing a book is how long you can keep on trying.

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scotthyoung.com

**A lottery refers to a random draw.**

**Lotteries can be used in decision-making situations**, for example, sports team drafts.**Lotteries are also a form of gambling**that encourage people to pay a small sum of money with a chance of winning big. The total value of prices is often determined by the amount raised after expenses incurred by the promoter. But other lotteries offer predetermined prizes.

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*If you no longer go for a gap that exists, you’re no longer a racing driver.*

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