Comment by kqr
4 years ago
Yet if we set up a game with a penalty proportional to the distance between your guess and the true number of children for a family, and you guess the median or mode, you'll be right more often than I (because I will never be right), but you will also continually be losing money to my guess of the mean.
What matters in real life is generally not how often you are correct, but rather by how much you are wrong. What you need to minimise is not your error rate, but the consequences when you are wrong. You are free to make an infinite amount of mistakes, as long as you are sure to make them in such a way that they are comparatively insignificant.
> Yet if we set up a game with a penalty proportional to the distance between your guess and the true number of children for a family, and you guess the median or mode, you'll be right more often than I (because I will never be right), but you will also continually be losing money to my guess of the mean.
Not sure were you went there, but the point is that you can overdetail in a way that abstracts from reality.