francisco javier diez bgvpkidiaunedes rich neapolitan wrote preparing talk whether people like warren buffet really better investment analysis simply case thousands people analysis probably well poor simply chance possibly different experiment many people toss coin many times experiment probably throw lot heads thinking conceived following paradox suppose stranger named mike showed office told could pick stocks really well advised year made bundle would suspect knew since chance successful chance alone small suppose instead 10000 guys also showed said could pick stocks well case mike still good results would dismiss success probably due luck since 10000 people likely someone well paradox follows faith mike penalized simply people made claims id interested opinions matter dear rich thought many times similar version paradox still puzzled sometimes found explanation gives light would present follows let us assume two friends b looking clairvoyant investment analyst trust significant amount money design test probability finding right answer accident 00001 order simplify analysis assume clairvoyant always find passes test one candidate depending result test decides trust contrary b passes test 10000 candidates decides trust pass test clairvoyants exist probability selects false clairvoyant 00001 probability 1 0999910000 063 b case policy clearly safer bs let us assume clairvoyants exist rare say 1 candidates probability investment analyst passes test 001 09900001 0010099 case likely scenario decides risk money analyst passed test contrary probability b selects analyst almost 100 given probability clairvoyant 100 times higher probability passing test accident around 99 probability b made right decision case bs policy would much profitable third scenario let us assume probably passing test accident 001 proportion clairvoyants 00001 probability candidate passes test 0010099 probability b selects true clairvoyant 1 clearly policy better summary bs policy prone selecting trusting analyst conservative one right depends 1 proportion clairvoyants practice proportion excellent analysts 2 probability passing test accident got outstanding results without excellent analyst come back question thinking conceived following paradox suppose stranger named mike showed office told could pick stocks really well advised year made bundle would suspect knew since chance successful chance alone small situation similar policy one candidate considered suppose instead 10000 guys also showed said could pick stocks well case mike still good results would dismiss success probably due luck since 10000 people likely someone well paradox follows faith mike penalized simply people made claims answer considered mike probability make mistake hiring smallas small probability got results accident please note scenario still following policy select candidate mike pass test course likely hire anybody contrary mike pass test hire one guys good results youve changed bs policy case youll analyst sure confidence much lower youll suspicion succeeded accident explanation solve paradox best regards javier díez francisco javier diez phone 34 913987161 dpto inteligencia artificial fax 34 913988895 uned cjuan del rosal 16 email bgvpkidiaunedes 28040 madrid spain httpwwwiaunedesfjdiez _______________________________________________ uai mailing list faqengrorstedu httpssecureengroregonstateedumailmanlistinfouai tue 05 aug 2008 171103 0200 uai luck skill