Stats Professors and State Lotteries

Last month, Washington and Lee professor Scott Hoover announced that he intended to sue the Virginia State Lottery (a threat that became a lawsuit yesterday).  Hoover, a business finance professor, wasn’t upset that he didn’t win the lottery–he was upset that it had become impossible to win the prize.  His complaint is that the Virginia Lottery advertises inaccurate odds on their scratch-off tickets.  If there is a scarce number of prizes to be won in a scratch-off game, then the odds of winning them drop to zero after they’ve been won.  However, scratch-off tickets advertising that it was possible to Continue reading Stats Professors and State Lotteries

Monty Hall still wants to make a deal

The New York Times recently highlighted a piece by M. Keith Chen that argues that some of the classic behavioral studies in psychology suffer from the Monty Hall Problem.  The basic situation game: An actor is presented with three choices (doors), A, B, and C.  There are two outcomes randomly distributed behind each door: a reward and two failures (a car and two goats).  Each door has an equal chance of containing any of the prizes (without replacement) and the actor chooses a door.  The game then reveals one of the non-chosen outcomes (if the player chose B, then the Continue reading Monty Hall still wants to make a deal