Following the laws of the universe through the lens of human perception is hard. There’s simply too much that we cannot innately understand, which is why we translate phenomena with the help of our instincts.
However, even the sharpest intuition can fall prey to human mechanisms of explaining the unexplainable. Some situations are patterns that we keep on rehashing for the sake of grasping the fabric of reality.
Some examples are intricate cases of psychological resonance, while others are simply parts of our ability to solve problems. The issue lies in how we’re able to formulate solutions for imaginary equations.
In this article, we will address one of the most infamous instances of bias that plagues our collective thinking: the gambler’s fallacy.
It’s an issue that has explained many a bad decision, some of which have led to disastrous results. Regardless of gravity and intensity, poor rationale because of this bias is a sliding scale that you should definitely know. It’s essential even if you don’t gamble.
We will discuss its definition, nature, rules, and applications. You’ll find this article simple to traverse, and we hope you’ll have a good read!
What is the gambler’s fallacy?
The gambler’s fallacy is a cognitive bias that entails a wrong belief in a sudden shift in results. The backbone is the idea that a random event that has happened multiple times in a row will eventually stop purely because it occurred too often already.
It’s a direct disregard of the idea that chance governs such outcomes. As the name suggests, it applies only to cases when any result depends solely on randomness. It’s specifically applicable in the case of splits with 50/50 chances.
However, the idea moves into other realms, not just random outcomes. People have attributed the thinking to situations such as stockbroking. The principle of asset volatility moving in unpredictable, perhaps unprecedented ways is something that has given a lot of pause.
Ultimately, the movement boils down to creating a pattern out of completely random results. Rather than going probabilistically or just relying directly on the unpredictability of chance, people are thinking that a change in outcome is due because it must be.
The unmistakable dangers of cognitive biases in the context of gambling
The gambling fallacy has several alternative names, but the most glitzy and recognizable remains the Monte Carlo fallacy. It’s how people have been associating it directly with the realm of gambling, hence its most common denomination.
The story goes that, on the 18th of August, 1913, at a roulette table in the world-famous Monegasque establishment, the ball fell on black 26 times in a row. The probability for this sequence of outcomes was 1 in approximately 68.4 billion, which tells you everything you need to know about how incredible it was for this to happen.
One of the best-known effects of this happenstance is how much money was lost during that time. Estimates tell us that millions upon millions of francs were in the wagering pots during that day, most of which went on red.
This tells us about what the gambler thinks when they make this mistake. The erroneous belief is that there must be a rule that counterbalances too many results that are the very same. It must be so that the next one will be on red because of how many were on black.
The fact is that there is no rule that clarifies that there must be a different outcome in any way. It’s just a matter of entropy working its way through a random system.
The hot hand and various applications in games of luck
We will dedicate this section to a short analysis of the gambler’s fallacy in various types of games of luck. Since there’s a strong possibility that every player runs into some sort of instance when the probabilities can awaken this bias, it’s good to know them in a way.
Please note that these are standard applications in the realm of casual gaming. It’s perfectly possible that using a free $10 no deposit bonus can lead to a session that tests your perception.
Let’s assess some instances that exemplify this fallacy and the way it creeps into your thinking:
⦁ When you play slots, physically or online, you can always have, say, 10 hands that go in a certain direction.
You’re on a losing streak, and you believe that the bad luck will dissipate, so you keep gambling. The losses can easily continue to accumulate since the results are completely random.
The same principle can easily apply if you’re on a winning streak, which means that you should keep spinning since prizes are due to return at any point. It’s a disregard of chance because you’re relying on an inexistent rhythm that influences your outcome.
⦁ Playing something like poker or blackjack can certainly be a matter of applied strategy. It can be a series of instances when you go around random results in a way that harnesses competitiveness and strategy.
It also requires a keen understanding of probability in real time. The issue arises when you believe that a certain sequence of drawing cards will inevitably shift your chances in a certain direction.
Are you having a streak of bad draws during the river in poker? How about misfortune when the last card hits during blackjack? If you believe that the next hand is going to be yours, the fallacy has already defeated you.
⦁ Even thinking like this in sports betting is particularly dangerous. Let’s say that you have been losing a certain type of parlay that you’ve placed multiple times during a given amount of time.
Every time you lose the accumulator, only one match proves to be the sore point. You keep up your strategy in hopes that, eventually, one big parlay is going to hit, covering for all of your losses.
If the only reason why you retain your strategy is that you think that a successful parlay is due, this bias has already taken hold.
Why we need to understand true randomness (and why it’s hard)
True randomness is the universal guide for how we should perceive gambling. It’s also how the universe works in many ways.
If a brick falls on your head at some point, you can blame both the lack of maintenance of that building, but it’s also the fault of your bad luck. Of all the times that it could’ve fallen, it happened specifically when you were passing by.
Some of us will blame fate, while others will think about the bad decision to pass by an area with this kind of risk. It’s a method of explaining misfortune through the filter of destiny. You’ll likely feel the need to rationalize whatever happened to your cranium.
There’s also a soft approach to taking in this flow of instances. Namely, to look at how probability works beyond the 50/50 split. It’s a reason behind the re-examination of bias in our human randomness perception in the academic field.
This tendency of ours to find patterns, which we know as apophenia, is a human element that requires a deep understanding of our nature. It’s hard to put the reins on this phenomenon, especially when it’s so deeply ingrained in how we function as human beings.
Conclusion: Responsibility for the sake of safety
We thought it best that we explore this matter as well. Discussing the need for safety and responsibility is almost a thing of duty, even in an article that talks about a phenomenon that can impact your perception.
We strongly believe that knowing what the gambler’s fallacy does to your perspective is mandatory. Stopping in your tracks when you feel like you’re falling into an emotional imbalance can safeguard your stability, not to mention help you keep a better hold of your money.
This is why understanding the completely random nature of your results (i.e., your luck) should give you the freedom to stop. Simply admitting that you have no luck during that time is easy. Next time you play, it may be the same. You play for fun, not to control your destiny.
As a result, you should remember that you are starting to think within the confines of the gambler’s fallacy when you stop thinking about games of luck as pure entertainment. You want to avoid that mistake since it saps the fun out of gaming.
Please gamble responsibly and enjoy the purity of grappling with chance!
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