Week 2: Explorers/Exploiters, Public Governance and Normals

Stanford GSB Sloan Study Notes, Week 2, Summer quarter

Pages assigned for reading: 310

  • Reminder: think of normals not in their absolute value, but as “how many standard deviations from mean” (Statistics)
  • After going through the theory and visualisations behind probabilities of standard normal distribution (Z) and t-distributions, I have a growing suspicion, that in 95% (pun intended) of real life business cases needing confidence estimates, we’ll be dealing with a simple constant: 2. (In case of 95% probability on standard normal distribution, Z=1.96 and in cases the sample size n < 30, you should technically use t but, it in reality tends to be so close, that all other uncertainties around sampling and data collection would rarely be less than the benefits of simplicity of multiplication by two) (Statistics reading + class discussions)

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