your browsing be-havior for a big mac: economics of per-sonal information online

As the term suggests, this comes from the bias that people tend to have regarding the likeliness of something that has been successful in the past to continue that way in the future.

As the probability of the conjunction of A with B, P(A&B), is always lower than the P(A) (or P(B)), then we can assume that the likelihood of a draw is lower than the probability of just one goal.Īnother quite common mistake that many people who bet incur in is the Hot Hand Fallacy. Therefore, the probability of A and B, P(A&B), is equivalent to both team A and team B scoring a goal (and the result to be equal to 1-1).

Probability of B, P(B) to correspond to team B scoring a goal (0-1).

Probability of A, P(A), is equal to team A scoring a goal (and the result to be 1-0).We can relate this fallacy to sports, as there is a lower probability of an event to happen if we add more restrictions.

This is called the conjunction fallacy as it refers that the probability of the conjunction, P(A&B), must be always smaller than the probability of its constituents, P(A) and P(B), as “the extension (or the possibility set) of the conjunction is included in the extension of its constituents.’’ For example, the probability of a person being a teacher is higher than the probability of a person being a teacher and a woman (even though, when describing a person with these characteristics, it is more plausible if we add more detail and, therefore, can incur in the mistake of thinking that it is more probable). Normally, we are more inclined to believe in the probability of an occurrence the more detailed it is, when in fact, and according to our statistics and probabilities lessons, it is exactly the contrary: the more exact and detailed an event is, the less likely it is to occur. The difference between plausibility and probability is the source of this fallacy.

Your browsing be-havior for a big mac: economics of per-sonal information online