Predicting Lotto Numbers

Jean-Robert Tyran, Sigrid Suetens and ,

No 8314, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We investigate the "law of small numbers" using a unique panel data set on lotto gambling. Because we can track individual players over time, we can measure how they react to outcomes of recent lotto drawings. We can therefore test whether they behave as if they believe they can predict lotto numbers based on recent drawings. While most players pick the same set of numbers week after week without regards of numbers drawn or anything else, we find that those who do change, act on average in the way predicted by the law of small numbers as formalized in recent behavioral theory. In particular, on average they move away from numbers that have recently been drawn, as suggested by the "gambler?s fallacy," and move toward numbers that are on streak, i.e. have been drawn several weeks in a row, consistent with the "hot hand fallacy."

Keywords: Gambler's fallacy; Hot hand fallacy; Law of small numbers; Representativeness (search for similar items in EconPapers)
JEL-codes: D03 D81 D84 (search for similar items in EconPapers)
Date: 2011-04
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: PREDICTING LOTTO NUMBERS: A NATURAL EXPERIMENT ON THE GAMBLER'S FALLACY AND THE HOT-HAND FALLACY (2016)
Working Paper: Predicting Lotto Numbers (2011)
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