Mental Shortcuts - Gambler’s Fallacy

Gambler’s Fallacy: The Myth of Balancing Forces

Have you ever found yourself in a situation where you feel like you know what’s going to happen next because of previous events? Maybe you’re taking a multiple-choice test and you’ve answered five C’s in a row, so you think the next answer must be different. Or maybe you’re at a casino and you’ve seen the roulette wheel land on black five times in a row, so you bet on red because you believe it’s “due.”

This way of thinking is called the gambler’s fallacy, and it’s a cognitive bias that can lead us to make irrational decisions. The gambler’s fallacy occurs when we believe that the probability of an event is influenced by previous events, even when the events are independent of each other.

Let’s say you’re flipping a coin, and it lands on heads three times in a row. Now you’re asked to bet on the next toss. Would you bet on heads or tails? Most people would choose tails because they believe that the coin is “due” to land on tails since it’s landed on heads so many times in a row. But the truth is that the probability of the coin landing on heads or tails is always 50/50, regardless of what happened on previous tosses.

This belief in balancing forces in the universe is what leads us to the gambler’s fallacy. We think that if something has happened a certain number of times in a row, it’s more likely to change in the opposite direction to balance things out. But this is simply not true.

The gambler’s fallacy can apply to any situation where there’s a sequence of independent events. It can affect decisions in sports, finance, and even asylum applications. A study by the University of Chicago found that asylum judges were 19% less likely to approve an asylum seeker if they had just approved the previous two. Similarly, loan applicants were more likely to get approved if the previous two applicants were rejected, and more likely to be rejected if the previous two were approved.

The gambler’s fallacy is a common trap for gamblers, and casinos love it because it creates the illusion that the gambler can predict where “the balance” of the dice or roulette wheel will go next. But the reality is that each roll of the dice, each spin of the roulette wheel, and each flip of the coin is an independent event with its own 50/50 probability.

To avoid falling for the gambler’s fallacy, it’s important to remember that independent events are not influenced by balancing forces of nature. Each event has its own probability, and previous events have no bearing on future outcomes. So the next time you find yourself thinking that a sequence of events is “due” to change, remember the gambler’s fallacy and make your decision based on the probability of the individual event, not what’s come before it.

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