Local Representativeness

The eighth graders in Indy are known to have an average IQ of 100. Fifty students have been randomly chosen to participate in a a special educational study. The first student tested has an IQ of 150. What is the average IQ expected for the 50 students

Avg = 101 The answer 100 is a subtle version of the ‘gambler’s fallacy’ in which samples are believed to ‘cancel out errors.’

Modified from, Kahnemann, Slovic, Tversky, Judgement Under Uncertainty: Heuristics and Biases, 1982, pg 24

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Notes:

In fact we committed the gambler’s fallacy if we said 100. That would assume that some error correction would kick in on the next 49 students and they’d average just under 100 to offset the first genius. The correct answer is 101. Remember that the gam