The Broken Leg Problem

The Broken Leg Problem

In psychology, there's something called the broken leg problem. A statistical formula may be highly successful in predicting whether or not a person will go to a movie in the next week. But someone who knows that this person is laid up with a broken leg will beat the formula.

This is the story of insider trading, spying on your opponent, reading the tea leaves, and countless other information sources to help with a future situation or decision.

Currently, it applies to the US presidential race. Will Biden step down? You can guess. I can guess. But we cannot know what a select group of insiders know. Is there a broken leg issue? Similarly, we do not know who Trump will select for his VP choice. Since Trump is also elderly, we can surmise his VP choice could be very important, though none of us know who it might be. We can guess – only.

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