Decisions by coin toss: Inappropriate but fair
P.S. Please don’t believe efficient market theory, don’t pick your stocks via a coin toss.
Abstract (Via SJDM)
In many situations of indeterminacy, where people agree that no decisive arguments favor one alternative to another, they are still strongly opposed to resolving the dilemma by a coin toss. The robustness of this judgment-decision discrepancy is demonstrated in several experiments, where factors like the importance of consequences, similarity of alternatives, conflicts of opinion, outcome certainty, type of randomizer, and fairness considerations are systematically explored. Coin toss is particularly inappropriate in cases of life and death, even when participants agree that the protagonists should have the same chance of being saved. Using a randomizer may seem to conflict with traditional ideas about argument-based rationality and personal responsibility of the decision maker. Moreover, a concrete randomizer like a coin appears more repulsive than the abstract principle of using a random device. Concrete randomizers may, however, be admissible to counteract potential partiality. Implications of the aversion to use randomizers, even under circumstances in which there are compelling reasons to do so, are briefly discussed.
Additional Exceprt (via Keren & Tigen)
Even a rational decision maker may occasionally meet choices that cannot be resolved by reasons and arguments alone. Typical situations are choices between two equally valuable options (should I go right or left), or settling a dispute between two actors who both want an advantage (who should play the white pawns). In some such situations randomizers are accepted, and even institutionalized as tie breakers. For instance, an old standing practice in soccer games is to toss a coin before the start of the game in order to determine which team will play the first half on which side and who is going to kick the ball first. There are several reasons justifying the use of a coin in this case: It gives both sides an equal chance and thus it is fair, it is efficient and fast and, most important, it probably has almost no effect on the final outcome of the game — its importance is negligible. In contrast when the outcome is important, a coin toss becomes less acceptable. Thus, in the 1968 European football championship, the semi-final between Italy and the Soviet Union was decided (after extra time) by a coin flip (Italy won and became the European champion). The fact that such an important game was randomly determined was so aversive that it was decided from then on to replace the coin toss by penalty kicks.1