Thursday, January 27, 2011

Law of large numbers

  • more sample, lagi accurate
  • overall result akan menghampiri mean --> so, variant individual result akan menjadi kurang penting..  
http://en.wikipedia.org/wiki/Law_of_large_numbers
In probability theory, the law of large numbers (LLN) is a theorem that describes the result of performing the same experiment a large number of times. According to the law, the average of the results obtained from a large number of trials should be close to the expected value, and will tend to become closer as more trials are performed.

http://www.allbusiness.com/glossaries/law-large-numbers/4947717-1.html
statistical concept holding that the greater the number of units in a projection, the less important each unit becomes. Group insurance, which gets cheaper as the group gets larger, is an example of the principle in application; actuarial abnormalities have less influence on total claims.

mathematical premise stating that the greater the number of exposures: (1) the more accurate the prediction; (2) the less the deviation of the actual losses from the expected losses (X - x approaches zero); and (3) the greater the credibility of the prediction (credibility approaches one). This law forms the basis for the statistical expectation of loss upon which premium rates for insurance policies are calculated 

Related law: "The Law of the Few"
http://en.wikipedia.org/wiki/The_Tipping_Point
"The Law of the Few", or, as Gladwell states, "The success of any kind of social epidemic is heavily dependent on the involvement of people with a particular and rare set of social gifts."[3] According to Gladwell, economists call this the "80/20 Principle, which is the idea that in any situation roughly 80 percent of the 'work' will be done by 20 percent of the participants."[4] (see Pareto Principle) These people are described in the following ways
  • dalam case ni, individual result kadang-kala menjadi pemangkin yang amat penting
  • see also: chain reaction buzzword

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