Gambler’s fallacy

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Simple statistics claims each event in a sequence is equally likely to occur because of the independence of random events. However, individuals tend to believe that random and non-random events will balance out.

For instance: there is an equal chance to get four girls in a row as to get two girls and two boys. Gender determination is a chance event. Sperm that determines the baby’s gender does not know how many girls or boys the couple has.

Gamblers fallacy

Similarly to gamblers, people believe it is “due” for a good hand. Chance is viewed as a self-correcting process to restore to equilibrium. Individuals expect probabilities to balance out. Nevertheless, deviations are not corrected as a chance process unfolds. They are diluted.

Adapted from

Bazerman, M.H. and Moore, D.A., 1994. Judgment in managerial decision making (p. 226). New York: Wiley.

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