In terms of making strategies better or worse, think of these two betting strategies:
A: Always be exactly 50% accurate
B: Accuracy of 40%, 5 out of 6 games; Accuracy of 100%, 1 out of 6 games
Both strategies have an expected accuracy in the long term of 50%. However, if you play these two games head to head, B loses way too often.
I'm not sure exactly what situation you're thinking about here. But I agree that if all that matters is whether one wins or loses, so that winning by a lot is no better than winning by a little, then expectation isn't the right number to look at, because it takes into account the size of the win or loss, and not just whether it was a win or a loss.
Google for "nontransitive dice".
Yeah, it's that anti-intuitive thing where people feel that they HAVE to guess at an exact 50% rate to generate random tosses.
That seems like a slightly different issue. But in the general category of statistical misconceptions, to be sure.
I asked three people at work yesterday the same question, which would be the most accurate: All Heads; HHHT HHHT ...; or random guessing. Of the three people, all three said Random. Two of these people had stats degrees as well. Go figure.
Stats degrees? Oh, my.
I'm probably better at math than psychology, but I'll take a guess at the thought process behind that. I suspect it's a matter of getting a bit confused about exactly what question they're trying to answer.
There's a random sequence of coin tosses, and there's some sequence of guesses that they're trying to analyze. The real question deals with the number of correct guesses. To be correct, a guess has to match its corresponding coin toss. Other coin tosses and other guesses don't matter. Either the guess matches
its toss or it doesn't. That's the only thing that matters. Of course, the same holds individually for each of the other guesses and each of the other tosses. So, they matter in that sense. But they're all totally separate. For each guess and corresponding toss, you check whether they match; and then, at the end, you count how matches there were.
I bet that when thinking about the HHHT... guess sequence, people tend to think to themselves, ok, let's see here, I know that a random sequence of coin tosses will have about half heads and half tails, while this sequence of guesses has three-quarters heads and only one-quarter tails. That can't be good. This must be a bad way to guess.
But the question isn't, which sequence of guesses has the same ratio of heads to tails,
overall, as the sequence of coin tosses. All that matters is whether each guess matches
its toss. If every single guess is wrong, for example, the head-to-tail ratio in the sequence of guesses will be about the same as in the sequence of coin tosses! (Namely, both near 50:50.) The two questions are not the same at all.