 The gambler’s fallacy fallacy (fallacy)Marko Kovic and Silje Kristiansen Journal of Risk Research, 2019, vol. 22, issue 3, 291-302 Abstract: The gambler’s fallacy is the irrational belief that prior outcomes in a series of events affect the probability of a future outcome, even though the events in question are independent and identically distributed. In this paper, we argue that in the standard account of the gambler’s fallacy, the gambler’s fallacy fallacy can arise: the irrational belief that all beliefs pertaining to the probabilities of sequences of outcomes constitute the gambler’s fallacy, when, in fact, they do not. Specifically, the odds of the probabilities of some sequences of outcomes can be epistemically rational in a given decision-making situation. Not only are such odds of probabilities of sequences of outcomes not the gambler’s fallacy, but they can be implemented as a simple heuristic for avoiding the gambler’s fallacy in risk-related decision-making. However, we have to be careful not to fall prey to a variant of the gambler’s fallacy, the gambler’s fallacy fallacy (fallacy), in which we do not calculate odds for the probabilities of sequences that matter, but rather simply believe that the raw probability for the occurrence of a sequence of outcomes is the probability for the last outcome in that sequence. Date: 2019 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:jriskr:v:22:y:2019:i:3:p:291-302 Ordering information: This journal article can be ordered from DOI: 10.1080/13669877.2017.1378248 Access Statistics for this article Journal of Risk Research is currently edited by Bryan MacGregor More articles in Journal of Risk Research from Taylor & Francis Journals |
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