Research on decision making under uncertainty demonstrates that intuitive ideas of randomness depart systematically from the laws of chance. Two such departures involving random sequences of events have been documented in the laboratory, the gambler's fallacy and the hot hand. This study presents results from the field, using videotapes of patrons gambling in a casino, to examine the existence and extent of these biases in naturalistic settings. We find small but significant biases in our population, consistent with those observed in the lab.
Bibliographical noteFunding Information:
The authors thank Eric Gold for substantial contributions in earlier stages of this project. Thanks also to Jeremy Bagai, Dr. Klaus von Colorist, Bradley Ruffle, Paul Slovic, Willem Wagenaar, participants of the J/DM and ESA conferences, at the Conference on Gambling and Risk Taking and at seminars at Wharton, Caltech and INSEAD for their comments on this paper. Special thanks to the Institute for the Study of Gambling and Commercial Gaming for industry contacts which resulted in the acquisition of the observational data reported here. Financial support from NSF SES 98-76079-001 is also gratefully acknowledged. All remaining errors are ours.
- Field study
- Perceptions of randomness