Paul the Octopus Exposed!

In the aftermath of the FIFA World Cup and the remarkable tipping of Paul the Octopus, Australia's aquaria have been quick to jump on the cephalopod bandwagon.
At the Sydney Aquarium, Bugsy the Octopus has enjoyed â15-minutes of fameâ with appearances on Channel Nine News and in the Sydney Morning Herald, while at the Melbourne Aquarium, Dave the Giant Octopus has apparently become an expert AFL tipper.
However, risk management consultancy Reliance Risk have undertaken a probability (likelihood) assessment to see how exceptional Paulâs results were, and compared them to the likelihood of other seemingly random events (consequences).
As Reliance Risk Principal Wayne Middleton explains âfor those who donât know, (Paul) the Octopus correctly predicted the results of all eight of Germanyâs (FIFA World Cup) matches. He chose the winners by deciding which one of two boxes to eat mussels out of; each box was marked with the national flag of one of the teams playing. Paul has been lauded as a hero, with the BBC labelling him as âpsychicâ and âpropheticâ, while Reuters branded him the âoracle octopusâ.�?
In their analysis Reliance Risk highlight that:
⢠The probability of Paul correctly predicting the result of the first match is 0.5 (50%). There was no option for Paul to pick a draw, so this has been excluded from our analysis.
⢠The probability of Paul correctly predicting the first two matches correctly is 0.5 x 0.5 = 0.25 (1/4 or a 25%).
⢠Fast-forward our analysis, and the probability of Paul correctly predicting all eight matches is .391% (1/256)!
To put in context this level of chance, compare the following statistics:
An Australian Institute of Criminology report published in 2005 claimed that the national average of burglaries per 100,000 people was 1,397, or about 1/170.
The Federal Office of Road Safety reported in 1999 that the national average of road fatalities per 100,000 people was 9.3, or about 1/110,750.
The National Lightning Safety Institute in the USA claims that the national average of being struck by lightning per 100,000 people was .357, or about 1/1,280,000.
The chance of winning a 6-number lottery is about 1/14,000,000.
The chance of winning Powerball is roughly 1/127,400,000.
Middleton adds âwhile the probability of Paul correctly guessing all eight winners was far more likely than winning Powerball, his chance of success was still 1/256 or less than half of 1%. The figures above suggest that if he were in Australia, there is a greater chance of Paul getting stolen in a burglary than picking eight winners.
âGiven Australiansâ love of seafood, gambling and celebrity, perhaps this risk is even greater.�?
âHowever, the truth to this story lies not in the arithmetic of betting but in the art of fishing. Any good trout fisherman will tell you that, âthe brighter the day, the brighter the lureâ. Could it be possible that, under all those bright TV camera lights, Paul was just picking the boxes based on which flag was brighter?�?
Wayne Middleton can be contacted on 0407 493 949.

http://www.reliancerisk.com