Sunday, 27 November 2016

Even expert forecasters often treat a strong possibility as though it is a certainty.

Why forecasters failed to predict Trump’s victory: Tim Harford in London's Financial Times

"The truth is that once Trump had secured the nomination, a Trump presidency was always a strong possibility. The betting markets seemed to recognise this, offering odds of three-to-one a week or so before the poll. Three-to-one shots happen all the time — or at least, about a quarter of the time. A defeat for Hillary Clinton may be far more consequential than a defeat for Manchester City and, therefore, far more shocking but it shouldn’t be any more surprising. Favourites do not always win."
"... we have to keep an open mind that more than one outcome is possible. Too many people equated “Clinton is the favourite” with “Clinton will win”. That’s an obvious error, but it’s common. Even expert forecasters often treat a strong possibility as though it is a certainty. This tendency is one reason that dart-throwing chimps give the experts a run for their money. The chimps make lots of forecasting errors too, but at least they don’t systematically overrate their chances."

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