Suppose, we are calculating sample mean, as the number of samples increases the output accuracy increases, this theory says that as the samples/iterations/trials approach infinity we get most accurate output
Applications of law of large numbers
- Polls and surveys – Larger sample sizes in polls and surveys are more reliable for accurate prediction
- Insurance companies – The law of large numbers helps estimate expected values of insurance premiums by considering historical data and a large number of insured individuals
- Quality control in product lines
