Tag Archives: chance

Idea Soup

Fate Isn’t All That It’s Cracked Up to Be

If you believe in the luck of the draw, the turn of a card, the spin of a wheel; if you believe in the leaves in your teacup, the lines on your palm, or the numbers in your fortune cookie; if you believe in fate or a psychic or the neighbor’s black cat, then you are all the poorer for it — perhaps not spiritually, but certainly financially.

From the Telegraph:

Strange as it sounds, a serious study has been undertaken by academics into the link between people’s propensity to trust in luck, or fate – and their financial success.

And it has concluded the less faith someone places in luck, fate or some other “external factor”, the more wealth they are likely to accumulate.

Some might say the conclusion is commonsense but the report – produced by three academics at the University of Mebourne in Australia – even came up with a figure of AUS$150,000 (£82,000), which was the difference over four years between “households who believe fate will determine their future” and “households that believe they can shape their own destiny.”

The report, here, titled “Locus of control and savings”, splits psychological profiles into two groups, those with either an “internal” or “external” “locus” of control. The latter are people who believe that fate, or luck – or other people – are the determining force in shaping their lives. Those with an “internal locus of control” are those who are “strong believers in their ability to shape their own destiny.”

The survey then linked pshychological measures of behaviour to national savings data. “We find that households in which the reference person has an internal locus of control save more both in terms of levels and as a percentage of their permanent incomes than do households with external reference persons.”

It arrived at a precise financial measure, saying: “over a four year period households with a strong sense of shaping one’s destiny are on average $150,000 better off, and save 7.7% more of their income.”

The authors claimed that although their work relied on Australian data, it would reflect trends in other developed economies.

The work is one of a growing number of studies into what motivates saving, the type of people most likely to save – and how governments can stimulate more saving.

Read the entire article here.

Idea Soup

Chance as a Subjective or Objective Measure

[div class=attrib]From Rationally Speaking:[end-div]

Stop me if you’ve heard this before: suppose I flip a coin, right now. I am not giving you any other information. What odds (or probability, if you prefer) do you assign that it will come up heads?

If you would happily say “Even” or “1 to 1” or “Fifty-fifty” or “probability 50%” — and you’re clear on WHY you would say this — then this post is not aimed at you, although it may pleasantly confirm your preexisting opinions as a Bayesian on probability. Bayesians, broadly, consider probability to be a measure of their state of knowledge about some proposition, so that different people with different knowledge may correctly quote different probabilities for the same proposition.

If you would say something along the lines of “The question is meaningless; probability only has meaning as the many-trials limit of frequency in a random experiment,” or perhaps “50%, but only given that a fair coin and fair flipping procedure is being used,” this post is aimed at you. I intend to try to talk you out of your Frequentist view; the view that probability exists out there and is an objective property of certain physical systems, which we humans, merely fallibly, measure.

My broader aim is therefore to argue that “chance” is always and everywhere subjective — a result of the limitations of minds — rather than objective in the sense of actually existing in the outside world.

[div class=attrib]Much more of this article here.[end-div]

[div class=attrib]Image courtesy of Wikipedia.[end-div]