To my taste, popular discussion of
the well known paradoxes in probability
often misses the
point, so let me explain some of my own thoughts.
The word paradox is used rather broadly, and I categorize some uses below.
Your intuition is wrong (YIIR)
Textbooks and popular science books describe iconic "Bayes rule" examples:
false positives
and
the prosecutor's fallacy
and the famous Tversky-Kahneman
taxicab problem.
Here YIIR is manifestly true: human minds do not automatically implement Bayes rule in these contexts!
A second standard context where YIIR is manifestly true is "coincidences are more likely than you think", inevitably illustrated by the
birthday problem.
Psychology literature, and notably Kahneman's wonderful popular account
Thinking, Fast and Slow,
discuss how these and other
cognitive biases
arise.
I tend toward a rather simplistic answer:
Most YIIR examples occur because you confuse an uncommon or intangible situation
with a more common or tangible one.
Human minds presumably evolved to deal with the latter.
For instance,
one common explanation of YIIR in the birthday problem is that you confuse it with the
situation where you consider a match with your birthday, which requires about 250
people for a 50% chance of a match.
Pondering "does someone else have a May 5 birthday?" is more tangible than
"are there some two people with the same birthday?".
A less common observation is to compare with the situation where everyone in a group introduces themself by
saying their first name.
If two people have the same first name, this does not seem so surprising.
Memory of grade school suggests it is quite common for two children in a class
of 30 to have the same first name, and mathematics confirms this (see Extras below).
So in a sense the "paradox" is that we don't recognize the birthday setting as being essentially the same
as the "same name" situation we understand from experience.
Other YIIR examples such as the Monty Hall problem
and Nontransitive dice
deal with rarely encountered situations but are useful in learning the math.
Incompletely specified model
The mathematical setup of Probability is designed
so you can tell when a mathematical model is
completely and consistently specified, in which case any numerical question within the model has some definite answer.
But it does not tell you how to go from a verbal description of a question to the mathematical model.
This is the case for examples like
the Bertrand paradox
and the two envelopes problem,
discussed from another viewpoint here.
The point is that such paradoxes immediately go away when you completely specify the model;
how the chord is chosen in the former example, and a prior distribution on the envelope amounts
in the latter.
Somewhat related are observations claimed to be paradoxes based on some fundamental misunderstanding.
For instance Parrondo's paradox does not recognise that the mathematical notion of "fair game" is martingale.
Fantasy stories
I am puzzled by the habit of embedding an asserted paradox into a fantasy story, exemplified by the
aptly-named Sleeping Beauty problem,
because if you cannot find a more realistic story to make a point, then the point ipso facto
can hardly be relevant to the real world.
More about fantasies.
A paradox that deserves to be more widely known is
A bet may be favorable to both parties.
This involves a trick, of course, and goes as follows.
Suppose I
(resident in the U.S.) and a friend (resident in the U.K.)
agree that there is a 50-50 chance that, one year from now,
the pound/dollar exchange rate will be on either side of 1.28
dollars per pound. (The figure didn't matter, just that we agree on the
figure). We could now make a bet:
If 1 pound is at that time worth more than 1.28 dollars then he will pay
me 1 pound; if not then I will pay him 1.28 dollars.
So what will happen?
From his viewpoint he either loses 1 pound or wins an amount that
by definition is worth more than 1 pound;
from my viewpoint I either lose 1.60 dollars or win an amount that
by definition is worth more than 1.60 dollars;
and since we agreed it was a 50-50 chance, to each of us this is a
favorable bet.
The reader will quickly see the trick: we are measuring in different units which vary in a way
related to the random event in question.
A final and (I believe) recently noticed paradox involves our running theme of
prediction tournaments.
In any natural model of a sports setting, for a league season or a tournament with one eventual winner,
the relatively most likely winner will be the best team.
(How likely this is in absolute terms depends on the variability of skills amongst teams).
This is illustrated in the left figure below, taken from and
explained more in this paper.
Consider instead a natural model of a prediction tournament.
Regarding one-on-one comparisons between contestant, this is like a sport: the more skillful contestant is likely to perform better.
But paradoxically, under somewhat plausible assumptions, the winner of a prediction tournament is
most likely to be one of the good-but-not-best cohort .
This is illustrated in the right figure above, taken from and
explained more in this paper.
Footnotes
This figure shows the ``effective number" of names for boy/girl babies born in the U.S. in different years.
Here "effective number" relates to the birthday problem.
In particular for girls born in 2000 this number is around the number of days in a year.
So for a group of young ladies who were born in 2000, the chance some two have the same birthday is roughly the
same as the chance some two have the same given name.