Other Statistical Phenomena
Regression toward the mean simply says that, following an extreme random event, the next random event is likely to be less extreme. In no sense does the future event "compensate for" or "even out" the previous event, though this is assumed in the gambler's fallacy (and variant law of averages). Similarly, the law of large numbers states that in the long term, the average will tend towards the expected value, but makes no statement about individual trials. For example, following a run of 10 heads on a flip of a fair coin (a rare, extreme event), regression to the mean states that the next run of heads will likely be less than 10, while the law of large numbers states that in the long term, this event will likely average out, and the average fraction of heads will tend to 1/2. By contrast, the gambler's fallacy incorrectly assumes that the coin is now "due" for a run of tails, to balance out.
Read more about this topic: Regression Toward The Mean
Famous quotes containing the word phenomena:
“The phenomena of the year take place every day in a pond on a small scale. Every morning, generally speaking, the shallow water is being warmed more rapidly than the deep, though it may not be made so warm after all, and every evening it is being cooled more rapidly until the morning. The day is an epitome of the year. The night is the winter, the morning and evening are the spring and fall, and the noon is the summer. The cracking and booming of the ice indicate a change of temperature.”
—Henry David Thoreau (1817–1862)