When Luck is Mistaken for Skills

Jordi Brandts and colleagues got a group of students to predict a sequence of five coin tosses, and then selected the best and the worst predictor. They then asked other subjects to bet on whether the best and worst predictor could predict another five coin tosses. The subjects were told that they would bet on the worst predictor from the first round, unless they paid to switch to the best predictor.

82% of subjects paid to make the switch.

But of course, there is no such thing as an ability to predict the toss of a coin. Most subjects, then, saw skill where there was only luck. And, what’s more, they were willing to spend good money to back this daft opinion.

These people weren’t just idiots plucked from the street. They were fourth year finance undergraduates at one of the best universities in Spain.

Would you bet money on someone you think is a good guesser? Is there even such as a thing as good guessing when it comes to flipping a coin? A bunch of finance students in Spain appeared to think so, which just goes to prove that sometimes people mistake luck for actual skills. [via]

Photo: U.S. Navy

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