"A team of psychologists performed personality tests on 100 professionals, of which 30 were engineers and 70 were lawyers. Brief descriptions were written for each subject. The following is a sample of one of the resulting descriptions:
Jack is a 45-year-old man. He is married and has four children. He is generally conservative, careful, and ambitious. He shows no interest in political and social issues and spends most of his free time on his many hobbies, which include home carpentry, sailing, and mathematics.
What is the probability that Jack is one of the 30 engineers?"
The answer given is that the probability is exactly 30%, since there are 30 engineers out of 100. But this ignores all of the information available in the description! Imagine if the description said "Jack's hobbies include writing compilers, hacking assembly code, World of Warcraft, designing new programming languages and LARP." Would we still conclude that there's only a 30% chance of him being an engineer?
A correct answer to this question should apply Bayes' rule. With E representing 'Jack is an engineer', L representing 'Jack is a lawyer' and D representing the description, Bayes rule tells us
P(E|D) = P(E) P(D|E) / P(D)
P(L|D) = P(L) P(D|L) / P(D)
where P(A|B) is 'the probability of A given B' and P(A) is 'the probability of A without taking other information into account'. We can ignore the common factor of 1/P(D) and we know that P(E)=0.3 and P(L)=0.7, so the relative probabilities of Jack being an engineer or a lawyer, given the description of him, are
P(E|D) ~ 0.3 * P(D|E)
P(L|D) ~ 0.7 * P(D|L)
so the a priori probabilities of Jack being an engineer or a lawyer need to be weighted by the probability of seeing the description that we did, given that Jack is an engineer or a lawyer! If you claim that there is a 70% chance of seeing the description if Jack is an engineer but only 30% if Jack is a lawyer, then taking all the evidence into account, you should ascribe an equal probability to the two possibilities.
Basic probability fail by the editors of Vanity Fair, I think.
[1] http://www.vanityfair.com/business/features/2011/12/kahneman...