Sunday, September 30, 2012

All these numbers and what they mean

There are innumerable facts which are indecipherable and paradoxes which make up facets unexplored in terriotories unscaped. I recently happened to talk about the two envelope exchange paradox and how we define the expected return value. The sample space defined can make up many numbers giving me a higher expected return to always make a change in the envelope. This problem is a paradox, because once you made the change and if you were offered the chance again, we would make the switch back. Of course, the problem is innane if we consider only the two envelopes.

To make things interesting, lets say you chose the other envelope, without actually knowing the values quantitaively. Now instead of on the next trial, being offered the same two envelopes, you are offered a new envelope and posed the same argument, would this change your behaviour. The fact is that it is still the same problem, but you somehow think you can deduce the "objective payoff" better.

So what do the numbers mean, the numbers don't exactly mean what they are. It is embedded in a deep sense in the way you see it and understand it. Dabbling in the science of data and visualizations, I have realized there are many ways to look at the same numbers to infer different mechanims and parameters. The objective function bias is very subjective and is inherently fixed in the representation of the problem.

Perhaps, in the future, my bias will be neutral and I will be able to see through the indecipherable facts and paradoxes.

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