You encounter a handicapped little boy/girl on the street asking for money, and you know as a fact that some parents deliberately have their children's limps chopped off in order to make it more credible that their children deserve your charity.
Choices open to you:
You give some money to the kid but at the risk of providing help to someone who does not deserve it in the first place. Worse, you may unintentionally encourage more parents to chop off their kids' limps to make a living! (Kind of like the Type II error in statistics)
You refuse to give money to the kid but at the risk of failing to help someone who really can use some assistance, say the kid lost his/her limps in a car accident. (Kind of like the Type I error in statistics).
Sad fact: the above scenario is not a fake one but one can easily encounter while walking on a busy street in Hong Kong.
What would you do?