“We can often think of. An outcome is being a sequence of random events. And if an outcome of sequence of random events, what we’re gonna expect to see, is we’re gonna expect to see an expect value of zero. But we’re gonna see some big winners and some big losers. And we can’t then necessarily infer just because someone?s been successful in the past, But fairly successful in the future. So we start with two random walkers and one who happened to go up and one who happen to goes down, and then we think, right, who in heaven’s sake are we gonna place our bets on. Well, this one’s just as likely to go down as this one is to go up. You don’t know anything. So what we really want try and figure out in these situations is, is something a random walk? Or is it not? Is there some reason to believe that there is, that this person’s going up for a reason. And this person’s going down for a reason, or is the data consistent with things being purely random? And if it is, we should expect some regression in the mean, we should expect the two of them to perform about the same. “- Transcript from Scott Page Coursera
Source:
Scott Page Model Thinking MOOC Course
