The role of experience in the Gambler's Fallacy

✍ Scribed by Greg Barron; Stephen Leider

• Publisher: John Wiley and Sons
• Year: 2010
• Tongue: English
• Weight: 156 KB
• Volume: 23
• Category: Article
• ISSN: 0894-3257
• DOI: 10.1002/bdm.676

✦ Synopsis

Abstract

Recent papers have demonstrated that the way people acquire information about a decision problem, by experience or by abstract description, can affect their behavior. We examined the role of experience over time in the emergence of the Gambler's Fallacy in binary prediction tasks. Theories of the Gambler's Fallacy and models of binary prediction suggest that recency bias, elicited by experience over time, may play a significant role. An experiment compared a condition where participants sequentially predicted the colored outcomes of a virtual roulette wheel spin with a condition where the wheel's past outcomes were presented all at once. In a third condition outcomes were presented sequentially in an automatic fashion without intervening predictions. Subjects were yoked so that the same history of outcomes was observed in all conditions. The results revealed the Gambler's Fallacy when outcomes were experienced (with or without predictions). However, the Gambler's Fallacy was attenuated when the same outcomes were presented all at once. Observing the Gambler's Fallacy in the third condition suggests that the presentation of information over time is a significant antecedent of the bias. A second experiment demonstrated that, while the bias can emerge with an all‐at‐once presentation that makes recent outcomes salient (Burns & Corpus, 2004), the bias did not emerge when the presentation did not draw attention to recent outcomes. Copyright © 2009 John Wiley & Sons, Ltd.