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The Gambler’s Fallacy – It Affects More Than Gambling

The Gambler’s Fallacy – It Affects More Than Gambling

If you play any casino game, then you’ve probably heard of the gambler’s fallacy. This is the false sense that the fewer times a certain event happens, the more likely it is to happen. The human brain is actually geared to believe the gambler’s fallacy, but the mathematics prove that the idea is nothing but a fallacy, or fake news, if you prefer!

If you need convincing, here are the mathematics:

In European Roulette, the odds of a red number coming up on the first turn are 18/37, as there are 18 red numbers on the wheel, and 37 numbers in total. Therefore, the odds are 0.486.

The wheel is spun ten times, and on each occasion, a black number has come up. On the eleventh spin, the odds of a red number coming up are … 18/37, as there are 18 red numbers on the wheel, and 37 numbers in total. Therefore, the odds are now … 0.486.

The gambler’s fallacy makes you feel reality can ignore the rules of mathematics.

The odds of a red number at the beginning of this sequence were 0.486, and the odds of a red number after ten successive black numbers is 0.486 – the same odds … but this doesn’t stop people hammering extra cash on red as they think the odds are in their favour. This is the Gambler’s Fallacy in full effect.

The problem with people is that you cannot convince them that the Gambler’s Fallacy is actually a fallacy, and that’s because the human brain is just wired that way.

There have been several, non-casino instances of the Gambler’s Fallacy having a severe effect on people. For example, there was the phenomenon of ’53 fever’ in Italy between 2003 and 2005 which become so intense that it killed at least four people.

The phenomenon began in Venice, Italy in around November 2003. The Venice lottery was one of the biggest lotteries in Italy at the time. This was a standard, twice-a-week lottery in which six numbers plus one bonus ball were drawn from a pot of ninety numbers. From that, it is easy to work out that, on average, each ball should be drawn around once every seven or eight weeks.

Hundreds of people lost plenty of money by repeatedly betting on ‘53.’

Around October people began to notice a strange anomaly – that the number 53 was ‘overdue’ an appearance. It had been drawn in May but had not been seen since. People, therefore, began to increase their purchase of lottery tickets, including the number 53 in each line they selected.

Number 53 still refused to appear. Convinced that this number was imminent, more and more people began to spend money on the lottery. One year passed, and number 53 refused to appear. Accusations were made stating that lottery officials were not placing the number 53 into the drawing machine. Even when officials showed, live on television, that this was not the case, lottery players claimed that the number 53 ball was slightly bigger than all other balls and therefore could not be drawn out of the machine.

People became known as ’53 addicts’, ploughing huge sums of money into ticket purchases hoping that their line containing 53 would finally be drawn. The addicts ran up massive debts, faced bankruptcy and even lost their homes.

There were tragedies too. A woman in Tuscany drowned herself, leaving a note explaining she had spent her family’s entire savings on the number. Another man killed his wife and child before committing suicide himself because of the money he had lost gambling on the number 53. One further ’53 addict’ was convicted of assaulting his wife because of the debt they had incurred.

It was estimated that a total above the equivalent of $3 billion was spent on chasing the number 53, which is an incredible average of $200 for each family in Italy. By January 2005, with the number 53 not appearing now for almost 20 months, around $550 million was spent on lottery tickets containing the number 53.

The number 53 finally made an appearance after nearly 200 consecutive draws.

Finally, in early February 2005, the number 53 was drawn by the Venice lottery machine. The Italian government ended up sharing around $500 million in winnings to an unspecified number of lucky winners. The Number 53 had been absent for 182 consecutive draws.

The Gambler’s Fallacy has been observed to influence decision-making in many other, non-gambling activities:

  • In Major League Baseball, it has been statistically proven that umpires are much less likely to declare a borderline pitch a strike if the previous pitch had also been called a strike as well.
  • Bank staff are less likely to approve a bank loan application if they approved the previous two applications. They are also more likely to approve a bank loan application if they rejected the previous two.
  • If football penalty shoot-outs, a goalkeeper is more likely to dive to the left if, on the previous attempt, they dived to the right, and vice versa.

It seems to be a part of human nature to believe that matters will even out, and the human brain does not like statistical anomalies. Also, a belief in the Gambler’s Fallacy is actually more prevalent in people with higher levels of intelligence that those with below-average levels of intelligence.

The Gambler’s fallacy defeats all, and especially those with higher levels of intelligence.

In 2012, a study in China was conducted using volunteering university students. Volunteers were asked to select whether the next card would be red or black in a simple ‘red or black’ guessing game. They were told that the chances of red or black were precisely 50:50.

It was found that those with higher IQs were more likely to select ‘red’ if the previous card was ‘black’ and vice versa, even though the best way of being successful at the game was to select the same colour each time. Those with lower IQs chose at random or stuck to the same colour.

It seems that defeating the Gambler’s Fallacy is hard because our brains are wired that way, however, if you are to prevent falling into the fallacy you need to tell your brain to take a back seat for once!

The Gambler's Fallacy: The Basic Fallacy (1/6)

 

23 Feb. 2020, by

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