Just When You Thought You Had Gambler’s Fallacy Figured Out

Along comes a couple of egg heads with fancy computers and mathematical formulas that end up popping your balloon. That is exactly what just happend with new research findings just releaed from a psychology professor in London. Nigel Harvey, along with his research assistant, recently published a study in Cognition. Their findings actually explain how Gambler’s Fallacy actually plays out in the real world.

First, a quick review to catch everyone up to speed here. Remember that the term Gambler’s Fallacy refers to the idea that if a gambler is experiencing a losing streak, the luck has to eventually turn around. You see this all the time; a online gambler loses his stake, then continues to play, sometimes even betting more in the hopes that the next hand dealt or the next spin of the roulette wheel just has to work out in his favor.

Uh, not so much. Even an elementary understanding of statistics tells us that the next spin of the roulette wheel should in fact have no relation to the next one. In other words, the wheel has no built in memory. So at least theoretically, the next spin is random and you are just as likely to win as you are to lose. You can demonstrate this to yourself by tossing a coin in the air a few times. Just try predicting which side is going to pop up.

But here’s the thing. During their research, the professor in fact discovered the exact opposite. In other words, it looked as if the roulette wheel really did have a memory. They demonstrated that the longer a gambler stayed at the table, the more likely he was to continue to lose. Hold on, that doesn’t even make sense. High school level statistics tells us that is impossible.

Puzzled at first, the professor and his assistant dug a little deeper, actually a lot deeper. After poring over the gambling data and meticulously analyzing the betting versus the results, it was right there in front of them. They uncovered what turns out to be a fascinating tidbit of human behavior characteristics.

Are you ready for this? It turns out that that online casino players who lost actually go for more risky bets. And then, as the losing streak continues, the bets get riskier and riskier as the player tries in vain to make up for the growing losses.

Bottom line: the laws of statistics still hold true. Gambler’s fallacy has once again proven to be a loser’s game. If nothing else, a savvy online gambler has to know when to walk away.

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