Statistical Inference: Using the NFL
Sometimes people will make a mistake in one setting when they would never do so in another. Try these two statements about this weekend's football games. Both are true.
- The Cowboys have never beaten the Packers at Lambeau Field. What information does that provide about tonight's game? Does it establish a trend? (The actual record is 4-0. The Cowboys won once when the Pack played some games at Milwaukee County Stadium, but that does not count). Should you play against this trend, figuring that the Cowboys are "due?"
- We got a note from a friend who informed us that his "service" was really hot last week. Should we follow the choices for this week, expecting the hot hand to continue?
Investment Implications
Our guess is that most readers would get the football questions right. So why is it that so many of these same people make mistakes on something where they have real money at stake?
