What Is Gambler’s Fallacy?
Have you ever seen the roulette ball land on several reds in a row and then bet on black? I know I have and more times than I care to admit. Why do we do that? Gambler’s Fallacy, that’s why.
The concept of gambler’s family, sometimes called The Monte Carlo fallacy, is a simple one. It is the erroneous belief that if something happens more frequently than normal in the past, it is less likely to happen in the future.
A common example is the one in the opening paragraph. The best-known example earned gambler’s fallacy its Monte Carlo fallacy name. August 18, 1913, is the date something out of the ordinary happened at the Monte Carlo Casino. Gamblers playing roulette witnessed an unlikely event; the ball landed on black 26 times in a row!
This is almost unheard of and the probability of it happening is astronomical. The actual figure is somewhere in the region of 66.6 million to 1. Gambler lost millions of francs betting against black. They believed red was more likely to land on the next spin because so many blacks appeared beforehand. This is gambler’s fallacy at its finest, or should that be at its worst?
Gambler’s Fallacy In Action
Gambler’s fallacy only comes into play when a game’s outcomes are statistically independent of each other. A coin toss is a simple example to use. There are only two outcomes when tossing a coin: heads or tails. The chances are 50-50 when using a fair coin.
It doesn’t matter if you toss a coin ten times and they all ten land on heads. The chances of it being tails, or heads for that matter, on the 11th toss are still 50-50. Someone under the influence of gambler’s fallacy would bet tails in this example. They incorrectly think tails is more likely to land on the 11th toss.
Games with non-independent events don’t fall victim of gambler’s fallacy. These include blackjack where the probability of an ace coming next is less if one had already been dealt.
The Inverse of the Fallacy
There is also something called inverse gambler’s fallacy. Ian Hacking, a Canadian philosopher, described such a situation perfectly. He described a situation where a gambler walked into a casino and saw a person roll a double six with a pair of dice. The gambler may wrongly believe the dice roller had rolled many dice as it is so unlikely he’d roll a double six at the first attempt.
This fallacy is also prevalent in lotteries. Don’t pick 1, 2, 3, 4, 5, 6 on the British National Lottery. Why? Because 10,000 people play this selection every week because they wrongly believe it is super rare. It has the same chance as 1, 12, 13, 33, 45, 49 in reality.
How To Avoid Falling Into The Trap
It is very difficult to overcome falling into the trap of gambler’s fallacy. This is because humans are programmed to see and find patterns in things. It is how we have survived for so long and evolved as a species.
We do it without even thinking about it sometimes. It is human nature.
Arming yourself with knowledge is the best way to avoid being influenced by this phenomenon. Spend some time looking into the various odds and probabilities of games before you gamble on them. Read up on basic statistics and learn about variance, if you want some bedtime reading. You don’t have to go in-depth, a basic grasp of concepts will help you.
Also, it’s worth trying to think of outcomes as being independent. Pretend that the next spin of the roulette wheel is the first of the night. Do this even if there have been 10 consecutive red numbers; try to block them from your mind. Cover the screen if you’re playing at an online casino, it will help you be a better gambler.