Flaw of averages

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Flaw of averages is a term coined by Sam Savage of Stanford University to describe the mathematical concept of Jensen's inequality to business executives and students. The flaw of averages states in effect that:

Plans based on average assumptions are wrong on average.

"The flaw of averages" was also used as the title of an article in Scientific American in 2005 on the non-uniformity of matter in the universe.

[edit] Further reading

Savage, Sam L. “The Flaw of Averages”, Harvard Business Review, November 2002, pp. 20-21.

[edit] External links

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