Saturday, August 10, 2013

Understanding the Birthday Paradox

Professional risk takers such as gamblers, insurance companies and banks are good at using counter intuitive situations like this to put you on the "wrong side" of a bet or contract.  It seems like you are being offered a very reasonable proposition but in fact you are extremely unlikely to benefit from the risk you are taking:


"23 people. In a room of just 23 people there’s a 50-50 chance of two people having the same birthday. In a room of 75 there’s a 99.9% chance of two people matching."

http://betterexplained.com/articles/understanding-the-birthday-paradox/

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