Outcome Bias

And finance Allah shmoop What is the gumball estimation Problem

All right You think it's a trick or black magic

or a grift But it's not oddly this gumball estimation

thing it seems to work in fish tanks everywhere Okay

what is it Well here's a fish tank It's two

feet by three feet by three feet and it's filled

with these gumballs the master fish and that it be

me asks the audience to guess how many balls are

in the tank Yes there are always a few physics

geeks and Willy Wonka workers out there who just no

like you know the physics geeks mumble that well the

tanks twenty four inches by thirty six inches by thirty

six inches around thirty one thousand cubic inches and that

one ball fits into a cubic inch self There should

be like thirty one thousand balls in this thing and

then the Willy Wonka People just kind of know you

know somehow like Mpaluku loving brains But the way more

interesting science see social event is that the masses seemed

to get to the right answer just by guessing like

with doing no math So how does this happen Well

we don't really know actually But some kid blurts out

ten thousand Mr And then the fish host writes that

on the blackboard then some other kid blurts out twenty

thousand onto the blackboard It goes And then another kid

who sounds even older than that Second kids as our

thirty thousand and another says half a million and the

audience laughs and the fish host writes it down But

then a few adults shot out two hundred fifty thousand

eighty thousand one hundred thousand And after twenty or thirty

or so in samples here for guesses the host fish

calls stop and he adds up two total and divides

buy in and gets an average from all those guesses

And here's the weird thing The guesses are uncannily accurate

How can this be Why can this be How does

this actually work Well it seems as if some of

us are pretty good guessers Others of us The optimists

among us perhaps routinely go over in our guesses while

all the Debbie downers out there will always go away

too low in their gases But there's about the same

number of optimists and downers out there so they kind

of coalesce around some middle of the bell curve And

that middle the bell curve seems he crazily accurate In

the end everything evens out And again we're not totally

sure how the averages come out so eerily correct But

try this with your friends Next time you go to

a party or a fish tank thing like we're at

here you know maybe we should all just shrug our

fins and revel in the mystery What do you think