Economists Be Gambling

Yesterday I pointed to Ronald Bailey’s coverage of the famous Erhlich-Simon bet, and the just concluded Tierney-Simmons bet. Malthus falls to the Cornucopia. Twice.

Turns out there’s another wager brewing. At Marginal Revolution, Alex has the details:

Last week Steven Landsburg posted the classic puzzle:

There’s a certain country where everybody wants to have a son. Therefore each couple keeps having children until they have a boy; then they stop. What fraction of the population is female?

Being clever and worldly you may suppose that you know the answer, just as I did. 50%, right?

Every birth has a 50% chance of producing a girl. This remains the case no matter what stopping rule the parents are using. Therefore the expected number of girls is equal to the expected number of boys. So in expectation, half of all children are girls.

Clever! Except Landsburg being even more clever shows that the correct answer is in fact less than 50% (with the exact number depending on how many families there are in the country).

Clever people don’t like to be told they are wrong, however, so even after much explanation (follow Landsburg in the comments to the answer post) there remains disagreement. So Landsburg is offering a big money bet:

I am therefore offering to bet him $15,000 that I’m right (with detailed terms described below). If you agree with Lubos, this is your chance to get in on the action. I will take additional bets up to $5000 per person from all comers until such time as I decide to cut this off.

My only question is, when will the government protect us from these shameless economists, flaunting all of our laws against gaming? Arrest the game theorists first.

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2 Responses to Economists Be Gambling

  1. Jonathan says:

    Having looked into the Landsburg bet some, I find what he’s done to be totally unremarkable. By changing the problem with certain constraints, you get a different result. That’s fine, but most of the people who think he’s wrong are assuming he’s actually talking about the original problem, which he’s encouraging gem to do, and only adds to the confusion. A friend pointe out this wholly relevant XKCD:

    • Aaron says:

      Are you suggesting he’s taking unfair advantage of unsophisticated bettors? Where are the Feds to clamp down on this blatent abuse, this Freakonomical tyranny? Someone get Elizabeth Warren, STAT. Clearly, Obama should appoint a Stats Czar.

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