Browse Definitions :
Definition

law of averages

The law of averages is an erroneous generalization of the law of large numbers, which states that the frequencies of events with the same likelihood of occurrence even out, given enough trials or instances. The law of averages is usually mentioned in reference to situations without enough outcomes to bring the law of large numbers into effect.  

A common example of how the law of averages can mislead involves the tossing of a fair coin (a coin equally likely to come up heads or tails on any given toss). If someone tosses a fair coin and gets several heads in a row, that person might think that the next toss is more likely to come up tails than heads in order to "even things out." But the true probabilities of the two outcomes are still equal for the next coin toss and any coin toss that might follow. Past results have no effect whatsoever: Each toss is an independent event.

Another example of the law of averages involves batting averages in baseball. If a player has a batting average of .250, then he can be expected to get a hit on one out of every four at-bats (not counting bases on balls) in the long term. However, as anyone who follows baseball knows, hitters' fortunes run in "streaks" and "slumps" that can last for days or even weeks. During a "streak," a batter might get a hit in four out of 10 at-bats, and during "slumps" he might get a hit in only one out of 10 at-bats. If people invoke the law of averages when the hitter is "slumping," they will say that "he is due for a hit," suggesting on each and every at-bat that his chances are better than one in four because things "have to even out." However, according to the strict law of large numbers, no such supposition can be made.

The law of large numbers is often confused with the law of averages, and many texts use the two terms interchangeably. However, the law of averages, strictly defined, is not a law at all, but a logic error that is sometimes referred to as the gambler’s fallacy.

This was last updated in December 2012

Continue Reading About law of averages

Networking
  • unshielded twisted pair (UTP)

    Unshielded twisted pair (UTP) is a ubiquitous type of copper cabling used in telephone wiring and local area networks (LANs).

  • Multiprotocol Label Switching (MPLS)

    Multiprotocol Label Switching (MPLS) is a switching mechanism used in wide area networks (WANs).

  • computer network

    A computer network is a group of interconnected nodes or computing devices that exchange data and resources with each other.

Security
  • three-factor authentication (3FA)

    Three-factor authentication (3FA) is the use of identity-confirming credentials from three separate categories of authentication ...

  • cyber espionage

    Cyber espionage (cyberespionage) is a type of cyber attack that malicious hackers carry out against a business or government ...

  • role-based access control (RBAC)

    Role-based access control (RBAC) is a method of restricting network access based on the roles of individual users within an ...

CIO
  • knowledge-based systems (KBSes)

    Knowledge-based systems (KBSes) are computer programs that use a centralized repository of data known as a knowledge base to ...

  • Sarbanes-Oxley Act

    The Sarbanes-Oxley Act of 2002 is a federal law that established sweeping auditing and financial regulations for public companies.

  • project charter

    A project charter is a formal short document that states a project exists and provides project managers with written authority to...

HRSoftware
  • employee engagement

    Employee engagement is the emotional and professional connection an employee feels toward their organization, colleagues and work.

  • talent pool

    A talent pool is a database of job candidates who have the potential to meet an organization's immediate and long-term needs.

  • diversity, equity and inclusion (DEI)

    Diversity, equity and inclusion is a term used to describe policies and programs that promote the representation and ...

Customer Experience
  • sales development representative (SDR)

    A sales development representative (SDR) is an individual who focuses on prospecting, moving and qualifying leads through the ...

  • service level indicator

    A service level indicator (SLI) is a metric that indicates what measure of performance a customer is receiving at a given time.

  • customer data platform (CDP)

    A customer data platform (CDP) is a type of software application that provides a unified platform of customer information that ...

Close