A self-fulfilling fallacy?

Lady Luck is fickle, but many of us believe we can read her mood. A new study of one year’s worth of bets made via an online betting site shows that gamblers’ attempts to predict when their luck will turn has some unexpected consequences. A common error in judging probabilities is known as the Gambler’s Fallacy. This is the belief that independent chance events have an obligation to ‘even themselves out’ over the short term, so that a run of wins makes a loss more likely, and vice versa. An opposite error is the belief that a run of good luck predicts more good luck – when a basketball player succeeds in a number of successive shots, they are said to have a ‘Hot Hand’, meaning a better chance of succeeding with their next shot. While the hot hand might be possible in games of skill, it is a logical impossibility for truly chance events. Juimin Xu and Nigel Harvey from University College London, set out to study the role these fallacies might play in a highly relevant real-world setting: real bets made by people gambling online. ….[READ]