Glamor Economics

Chapter 34

Chapter 5 Section 6 Why the Death of the Elephant Changes the Decision-Making of Statisticians—Random Probability

During the Second World War, the German army often carried out air raids on Moscow. In order to avoid the air raids, people hid in the air-raid shelters one after another. However, a statistician always took it easy. His reason was simple: Moscow has 700 million residents, and The probability of an attack is too small.Then, an elephant at the zoo was killed by a bomb, and statisticians began to panic.When the German army launched an air raid on Moscow again and the air defense sirens sounded, the statistician, like everyone else, hurried to the air raid shelter.When his friend saw him, he was very surprised and asked him why he changed his usual practice.His answer was very surprising: "Look, Moscow has 700 million residents and an elephant, and last night they (German troops) blew up the elephant."

Did the death of the elephant make statisticians forget the theorems and formulas of statistics?Of course not, but the death of the elephant awakened the statistician, turning him from a bystander into a participant, and turning the bombing from a small probability event into a high probability event.

Probability refers to a phenomenon that cannot be predicted in advance, that is, repeated experiments under the same conditions, the results may not be the same each time, or the past situation of things is known, but the future development cannot be completely determined.Probability is an important concept in economics.

In the above story, if the statistician wants to win the German army, he must try to guess when and where the opponent will launch an air strike on Moscow, so as to reduce the probability of being bombed.He didn't hide in the air defense shelter before because he thought that there were 700 million citizens in Moscow, and the possibility of killing him was only one in 700 million; but when he heard that the only elephant in Moscow was killed by the bombing, he suddenly felt Once it is bombed, the probability of death is very high.In such a huge city, the only elephant was killed by a bomb, which means that once it is bombed, the probability of death is close to 100%. At this time, the model for calculating the probability has changed, so he feels panic and has to flee like everyone else. Into the air-raid shelter.

There is no standard answer to the question about probability, the key lies in the way of judging the probability.This is like playing bridge. If you want to guess what the opponent is about to play, you must capture as many characteristics of the opponent's cards as possible and summarize the rules from them, so that you can use the opponent's usual techniques to guess the opponent's cards.From the perspective of the person being guessed, it is necessary to avoid making the way of playing cards regular.The statistician's initial miscalculation of the probability model of the German air strikes caused him to be so surprised by the elephant's death that he completely changed his coping strategy.

There is a classic joke in securities investment, which is about the investment portfolio carefully selected by investment analysts who are exhausted, and a group of blindfolded monkeys randomly projecting darts on the stock quotation sheet.The investment choices made have no qualitative difference in the return on investment.That is to say, when the stock price fluctuates, it is impossible to predict the future trend through the analysis of historical data.

The "scissors-rock-paper" we usually play is just a choice of using probability.If your punches change regularly, you will often be discovered by your opponent, and thus have more chances to win you.And when you don't even think about what to do next time, that is, when you punch with a random probability, you will not be defeated by the opponent.This is the effect of using randomness to make decisions.

A boxer who returned from his studies had a dispute with his wife.The wife is gearing up and eager to try.The boxer thought to himself: "I have already learned martial arts, so am I still afraid that you will not succeed?" He never thought that before he got ready, his wife rushed up with all her teeth and claws, and beat him until his nose was blue and his face was swollen, and he was powerless to fight back.Afterwards, others asked him: "Since you have learned martial arts, why did you still lose to your wife?" The boxer said: "She doesn't punch according to the style, how can I parry?"

When fighting against opponents, random strategies may not seem to be tricks, but they are better than tricks.In mutual confrontation, everyone is a rational person. One side adopts a certain strategy, and the other side will make rational speculations and then make corresponding responses.At this time, if you adopt a random strategy so that he can't figure out the rules of your actions, you can defeat your opponent skillfully.The key to adopting a random strategy is to make your strategy unpredictable.

[links to related words]

Probability, also known as probability rate, chance rate or probability, possibility, is a basic concept of mathematical probability theory. It is a real number between 0 and 1, and it is a measure of the possibility of random events.

Random events are events that may or may not occur under certain conditions.

Basic event An experiment together with every possible outcome is called a basic event.

Equally probable events Usually an event in an experiment consists of elementary events.If there are n possible outcomes in an experiment, that is, the experiment consists of n basic events, and all outcomes are equally likely to occur, then such an event is called an equally likely event.

Mutually exclusive events are two events that cannot occur at the same time.

(End of this chapter)