Gambler’s Fallacy – Fall for it and Lose Like Crazy
By Yolky D Egg
The Gambler’s fallacy is the belief that if deviations from expected behavior are observed in repeated independent trials of some random process then these deviations are likely to be evened out by opposite deviations in the future. If one is invoking this fallacy then in the future is usually considered to be while the player is currently playing.
This is a fallacy of enormous proportions if carried too far since it is based on something other than mathematical probabilities. It’s just as bad if based on a few occurrences of a favorable event or even an unfavorable event.
Gambler’s fallacy, also known as the Monte Carlo fallacy or the fallacy of the maturity of chances. The gambler’s fallacy implicitly implies a negative correlation between trials of a random process such as flipping a coin and therefore rules out an exchangeability of outcomes of that random process.
The reversal is also a fallacy, the inverse gambler’s fallacy which is based on repeated outcomes of some random process where the unexpected happens on a regular basis so the false conclusion again arises that the continued occurrences of that outcome will eventually be evened out in the future by the expected results.
It is a great piece of skill to know how to guide your luck even while waiting for it.
Using coin tossing for example, if a fair coin is tossed repeatedly and heads comes up a larger number of times than is expected, a gambler may incorrectly believe that this means that tails is more likely in future tosses. The reverse is also true. Such an expectation could be mistakenly referred to as being due. This is an informal fallacy. It is also known colloquially as the law of averages.
Another example might be in shooting craps or dice. A long series of either winning or losing plays may have occurred where the roll of the dice either came up, for example, with many winning number combinations, way more than expected. In such a case a gambler may be lured into thinking that losing dice combinations will come up in future rolls of the dice, or the dice are due for such a result. Similar to above regarding coin tosses, the opposite holds true.
The fallacy is the belief that the “universe”, the coin, the dice, somehow carries a memory of past results which tend to favor or disfavor future outcomes of some random event. Basing your gambling on such a faulty premise is sure to lead to ruins if religiously carried out. Of course if one is lucky… well then anything is possible. But do you want to base your gambling on luck, – good luck?
Copyright © Charles L Harmon
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