Question

How does the ‘law of small numbers’ affect the interpretation of data?

Answer 1

Ans:

The law of small numbers is a general cognitive bias that makes people favour certainty over doubt. Most people, including many experts, don’t appreciate how research based upon small numbers or small populations often generate extreme observations. As a result people have a tendency to believe that a relatively small number of observations will closely reflect the general population. This is reinforced by a common misconception that random numbers don’t generate patterns or form clusters.

How does it cause bias or misinterpretation:

• Eliminates doubt by suppressing ambiguity and automatically constructs coherent stories that help us to explain our observations.

• It embellishes scraps of information to produce a much richer image than the facts often justify.

• Is prone to jumping conclusions and will construct a vision of reality that is too coherent and believable.

• Humans are pattern seekers and look for meaning in their observations.

• People do not expect to observe regular patterns from a random process and when they do see a potential correlation they are far too quick to reject the assumption that the process is entirely random.