Probability Studies

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ECON 225001

“Odds are Against your Breaking that Law of Averages” In this article James Trefil discusses key issues concerning the use of statistics and the study of probability. He gives us historical background on the development of probability studies tied to games of chance; basic ideas of probability that are part of our mental arsenal and can be used in all kinds of unexpected situations; implications on statistics. First of all, he talks about that probabilities take their place in every part of our life, how can we put statistics in our life, how can we calculate the probability, which is born in the study of games of chances. There is a calculation of rolling a die without getting a double “6” and he says that conventional thinking reveals that breakeven point in rolling a die for four times gives us 24 but it is revealed by De Mere that it is not 24 it is 25 for the double die game. And then he says that throwing die without getting 6 is 5/6 and if it would be thrown for four times iut gives us 5/6 times 4 equals .48 that means that we have 0.48 percent to win the game. Another example is roulette game, he says that in roulette there are 18 black 18 red slots in conventional way we night think that we have chance of 18/36 which is 50% of winning but there is also extras such as 0 and 00 numbers so we have 38 numbers and we have the chance of 18/38=47 percent. It is said in the article that there are two central ideas of probability; first is we divide number of ways that we can be successful by the number of ways that things can turn out as in the example of rolling a die. The second one is that the probability of an independent event doesn’t depend on what happened in the past. For example what comes when heads or tails when you throw the coin doesn’t depend on the last one. But if you try picking a card from a deck of cards it is depended if you take out each card from the deck when you pick them. Risk is defined...
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