The Gambler’s Fallacy is a cognitive bias that occurs when an individual believes that a certain outcome is more likely to occur due to a previous event. This belief is based on the false assumption that past events can influence future outcomes. The Gambler’s Fallacy is also known as the Monte Carlo Fallacy, the Fallacy of the Maturity of Chances, and the Fallacy of the Law of Averages.
Importance
The Gambler’s Fallacy is an important concept to understand because it can lead to poor decision-making. It is important to recognize when this cognitive bias is influencing our decisions so that we can make more informed and rational choices.
Example
For example, if a person is playing a game of roulette and the ball has landed on black for the past five spins, they may believe that the next spin is more likely to land on red. This belief is based on the false assumption that the ball is “due” to land on red because it has landed on black for the past five spins.
Table
Gambler’s Fallacy
- Definition A cognitive bias that occurs when an individual believes that a certain outcome is more likely to occur due to a previous event.
- Also Known As Monte Carlo Fallacy, Fallacy of the Maturity of Chances, Fallacy of the Law of Averages
- Example Playing a game of roulette and believing that the ball is “due” to land on red because it has landed on black for the past five spins.
Key Takeaways
- The Gambler’s Fallacy is a cognitive bias that occurs when an individual believes that a certain outcome is more likely to occur due to a previous event.
- It is important to recognize when this cognitive bias is influencing our decisions so that we can make more informed and rational choices.
- The Gambler’s Fallacy is also known as the Monte Carlo Fallacy, the Fallacy of the Maturity of Chances, and the Fallacy of the Law of Averages.
Conclusion
The Gambler’s Fallacy is a cognitive bias that can lead to poor decision-making. It is important to recognize when this cognitive bias is influencing our decisions so that we can make more informed and rational choices. By understanding the Gambler’s Fallacy, we can avoid making decisions based on false assumptions and instead make decisions based on facts and evidence.
