## Probability Theory for Crooks

It is unfortunate that crooks understand probability. Here is a scam that was very popular back in Russia.

A bad guy pretends that he has a close relative on the hiring committee of a college. He takes bribes from prospective students, promising to help them pass the entrance exams at this college. He doesn’t guarantee the admission, but he guarantees the money back. After getting the money, he does nothing. If the student passes the entrance exams, he keeps the money. If not, he returns the money. Simple probability — someone will pass the exams by chance, making him a lot of money.

Here is another Russian scam. This time the crooks have some understanding of conditional probability. These “psychics” promise to correctly predict the gender of your future child. They tell you a random gender, but for their bookkeeping they file the opposite gender. This way, even if you complain, they still keep your money. They show you their books and pressure you into believing that you misunderstood, misheard or misremembered the answer. The probability that you complain if they are right is zero.

Let us all learn probability theory to recognize scams and not fall for them.

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## Max:

Reminded me of the perfect prediction scam – http://www.investorhome.com/scam.htm

24 December 2008, 8:10 pm## Tanya Khovanova:

Thank you Max for the great link.

25 December 2008, 6:25 am## Teaching off topic 1 « JD2718:

[…] occur with university admissions in the Soviet Union, and Tanya Khovanova explains it nicely here: Probability Theory for Crooks. But my kids didn’t know […]

18 January 2009, 5:28 pm