The lies we tell ourselves - the gambler's fallacy
You're playing a game with friends that involves flipping a coin: if it lands on heads you have to perform a dare, but if it lands on tails, you get to choose a friend to perform a dare.
After ten minutes you and your friends notice that the coin has landed on heads fourteen times in a row, and it's your turn. Do you pick heads or tails?
You pick tails, rationalising that because it has landed on heads so many times now, the next one has to be tails.
Congratulations! You've just fallen victim to the gambler's fallacy!
Casino de Monte Carlo
The most famous instance of the gambler's fallacy occurred at Casino de Monte Carlo in the summer of 1913.
After the ball at a roulette table landed on black twenty times in a row, gambler's flocked to the table to place their bets on red, reasoning that the unexpected streak was a sign that red was due.
Round after round the ball continued to land on black. It wasn't until the twenty-seventh round that it finally landed on red, but by that time millions was lost due to the gambler's fallacy.
The lottery
You're at a friend's house for dinner when your friend makes a wild claim:
"I'm going to win the lottery this weekend, what shall I buy first?", he says with confidence.
Confused, you ask: "What makes you think you're going to win the lottery? I'm quite sure it's not predetermined!"
"Well..", your friend says, "...you know I've been playing the lottery for years and I've never one more than a few dollars. That can only mean on thing: I'm due a big win!"
What can we do about it?
Having a good understanding of probability is a sure-fire way of reducing your vulnerability to the gambler's fallacy. Knowing which events are mutually exclusive and which are not will help make reasoning about future events easier.
As comforting as it is to believe that there is a balancing force in the universe, it's simply not true: what goes around doesn't always come around.
Banner photo by Steven Depolo used under the CC-BY-2.0 license. Changes were made to the original.
Casino de Monte Carlo photo by Janice Waltzer used under the CC-BY-2.0 license. Changes were made to the original.
Other posts in the series:
- The lies we tell ourselves - the sunk cost fallacy
- The lies we tell ourselves - the framing effect
- The lies we tell ourselves - cognitive dissonance
- The lies we tell ourselves - confirmation bias
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What you didn't mention was that continuing to bet black for the opposite reason would also be the gambler's fallacy. :)
The human brain is amazing at noticing patterns, but it overdoes it, and finds patterns where they don't exist, such as rain dances and sacrifices. It took us thousands of years to learn to balance one of our species greatest gifts.
That's why the only game worth playing at a Casino is Black Jack, assuming it is not a revolving deck... ;)
poker all the way
Yea, but that is in a separate room entirely... when talking strictly casino games... that is your best bet.
Good post , and well what I'm not a gambler.
Gambling is certainly a poor method of acquiring money, if any. The funny thing is, there are signs everywhere in the casino telling you this. Never really been a fan needless to say.
Gambling is entirely designed around the player losing more than they're going to win, lol, gambling is crazy.
@imag1ne I wanted to include you guys in this comment as well.
Everyone is a gambler. We gamble on everything every day. You walk through the park and see two women. Do you approach them? If you fail you may feel awful, if you succeed you know the reward. Which do you approach? If you approach one you cannot approach the other, you must choose which one and either is a gamble.
I wrote a longer blog on this subject here: https://steemit.com/life/@daut44/life-is-full-of-gambling
Sigh... right. But gambling as an industry is what I was focusing on. I am well aware of the gamble of life, but its an entirely different game. Life isn't designed for you to fail, gambling as an industry is.
Sorry for not giving a proper reply, was actually busy gambling and typed out nonsense quickly :)
I'm a professional gambler and I hate gambling. I just spent 3 days in Vegas for a bachelor party and played 0 table games. As you say they are designed for people to fail. However, I'm not against them. I believe people are free to make their own choices (when they don't infringe upon the rights of others), and for those who play responsibly, they can derive fun from it and if they value the fun they have with their friends at a blackjack table more than the money they might lose, I don't see any problem with it.
But I also view what I do as very different than the traditional view of gambling. Games can be broken down into 3 pieces: games of pure skill, games of pure luck, and games that are a combination of skill and luck, and the latter 2 when combined with money are always grouped together as "gambling". Despite the house taking a cut out of every hand played, money can be made in the 3rd set of games that have luck but are predominantly skill based, and the house isn't trying to make people fail in them, it's just running a game in a safe place, trying to make money, and provide a place of entertainment for the people playing.
None of this disagrees what you say, but when it comes to subjects like this, I think clarification is always necessary because grouping seemingly similar things together with words that can be extended much further is careless.
nobody gets out alive
Yet energy cannot be created, nor destroyed. There is an essence of you that exists beyond physical deterioration of the body, what that is though I couldn't begin to explain. So do you ever really die? In the same token, are you ever really born?
Nice summary there... But I still can't help buying a lotto ticket once in a while- someone's gotta win right?
Very true.
There is a really low chance of getting 27 blacks in a row starting from the next spin. But if we already know there were 26 blacks, the chance of the next spin will be black is about 48.6% (if we have only one 0). It is two different thing.
The human brain was designed to recognize patterns and react to that. We needed it to survive in the nature. But sometimes we recognize false patterns especially in gambling.
The chance of getting 27 blacks in a row is the same chance as getting any of the 67,108,863 other combinations of red and black. People put an emphasis on streaks because it has order where they expect disorder. Wikipedia has a nice proof showing that it makes no difference what comes before.
Good stuff, thanks for writing this.
The thing is though, I am totally sure a big win! ;0)
I think that everyone I write on steemit. My last five articles "only" made around $200 each. I'm due a $5000+ article. The next one will be it!
(Note that this isn't totally the same because it's unlikely that steemit posts are independent events - once you have a good article, people tend to vote more for your next one based on the previous one)
I am going through a lull in article earnings so keep telling myself that more joy lies ahead, much as your post above states!
Nice topic. Most people have no clue they are victimis of themselves by daily making bad decisions based on the false premises that some special force is keeping things together. To be aware of the independence of events can be difficult when you try to rationalize and justify everything. Some people also believe everything is a coincidence and others claim the complete opposite.
A functional mind who really questions reality and a basic understanding of probabilities can avoid and/or solve many problems.