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The birthday paradox states that if there are 23 people in a room then there is roughly a 50/50 chance that at least two of them have the same birthday. For around 60 or more people the probability is greater than 99%. This is not a paradox in the sense of it leading to a logical contradiction; it is a paradox in the sense that it is a mathematical truth that contradicts common intuition.
Calculating this probability (and related ones) is the birthday problem. The theory behind it was described in the American Mathematical Monthly in 1938 in Zoe Emily Schnabel's The estimation of the total fish population of a lake, under the name of capture-recapture statistics.
The key to understanding the birthday paradox is to realize that, for any experiment or test of the paradox no particular date is specified. The shared birthday could be any date of the year and this date will vary each time the paradox is tested. Note that, if you enter a room with 22 people, the chance that somebody there has the same birthday as you is not 50/50, but much lower. This is because the day of the year that must be the joint birthday is already given, namely, by your own birthday.
To compute the approximate probability that in a room of n people, at least two have the same birthday, we disregard leap years and twins, and assume that the 365 possible birthdays are equally likely. The trick is to first calculate the probability that the n birthdays are different. This probability is given by
By contrast, the probability that someone in a room of n other people has the same birthday as you is given by
The birthday paradox in its more generic sense applies to hash functions where the number of N-bit hashes you can generate before probably getting a collision is not 2N, but rather only 2N/2. This is exploited by birthday attacks on cryptographical systems.
In his autobiography, Paul Halmos wrote:
How the birthday problem exemplifies bad effects of calculators
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