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Ludic Fallacy




Ludic fallacy is a term coined by the ), an inductive side-effect of human Cognition .

Humans generally fall into the Ludic Fallacy when they equate the probabilities of an event occurring to them with those of say, flipping a coin. This is a Fallacy because we can compute the probabilities of getting either heads or tails (50% chance), whereas we can't begin to compute the probabilities of an event occurring to us in real life.


EXAMPLE


Example 1

You and a colleague leave work and get to the train station just as the 5:15 pm is pulling away. Your colleague turns to you and says, "Well the chance of making the train was a flip of the coin anyway." This is a . By reducing the probability of the event to only 50%, your colleague has actually both ''reduced'' your ability to understand how frequently the event will occur and ''exposed'' you to a greater chance of encountering the consequences of the event in the future.

Example 2

A man considers going to a job interview. The interviewee has already learned Statistics and Utility theory in college and performed well in the exams. Considering whether to take the interview, he tries to calculate the Probability he will get the job versus the cost of the time spent.
The young job seeker here forgets that real life is more complex than the theory of statistics. Even with a low probability of success, a really good job may be worth taking the interview. Will he enjoy the process of the interview? What strategic value might he win or lose in the process? Even the statistics of the job business are non- Linear . What other jobs can come in the man's way by meeting the interviewer? May there be a possibility of a very high payoff in this company that he has not thought of?


EFFECTS

This fallacy is a bit sinister because it has three intertwined consequences. It inhibits our understanding of the world, leaves us with the impression that we understand the world better, and exposes us to future unknown risk. By utilizing you colleague's Analogy going forward, you don't understand that there could be a far greater or far lesser chance of making the train, but you ''think'' you know what your chances of making the train are, and in reality you now have a far greater or lesser chance of getting home on time. The future unknown risks involve the consequences of consistently getting home later than expected.


SEE ALSO



REFERENCES



FURTHER READING

  • The Ludic Fallacy. Chapter from the book "The Black Swan" {Link without Title}

  • Medin, D. & Atran, S. (2004) The native mind: Biological categorization and reasoning in development and across cultures. Psychological Review.111, 960-98

  • Fodor, J. (1983) Modularity of mind. Cambridge, MA: MIT Press.

  • Tales of the Unexpected, Wilmott Magazine, June 2006, pp 30-36, at http://www.fooledbyrandomness.com/0603_coverstory.pdf