Does the Behavior of Lottery Players Exhibit Gambler's Fallacy?
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"People don't like lottery or raffle tickets bearing the number 1.
On the one hand, reason tells us that it could us the 12,000
dollars just as well as any other ticket; on the other hand, we
can hear an inner voice exhorting us not to take it, for who has
ever heard of such a small number winning large prize?"
--------------Georg Lichtenberg (1742-1799)
On the one hand, reason tells us that it could us the 12,000
dollars just as well as any other ticket; on the other hand, we
can hear an inner voice exhorting us not to take it, for who has
ever heard of such a small number winning large prize?"
--------------Georg Lichtenberg (1742-1799)
I. Introduction
*Many people believe "Law of small number ", they
Understimate the repetition of strings of binary
signals from i.i.d sequence (gambler's fallacy)
*Rabin (2002) models this mistaken belief and
shows that the people lead to the tendency to
over-infer from short sequence and to believe in
nonexistent variation. This model can extend and
apply to the financial anomaly: under-
reaction/over-reaction phenomenon.
*Many people believe "Law of small number ", they
Understimate the repetition of strings of binary
signals from i.i.d sequence (gambler's fallacy)
*Rabin (2002) models this mistaken belief and
shows that the people lead to the tendency to
over-infer from short sequence and to believe in
nonexistent variation. This model can extend and
apply to the financial anomaly: under-
reaction/over-reaction phenomenon.
CMF
Member
Lotto Player Types & Gambler's Fallacy
I think there are 4 basic types of Lotto Players.
1. Quick Pick Players the overwhelming majority.
2. Random Selectors filling in the Entry Form in whatever imaginative way their brain tells them.
3. Those that play the same numbers derived from birthdays etc,
4 That small minority (myself included) who like to fill in the entry form in some constrained way by considering the numbers.
No 2 has always interested me because from the 8,000,000 million or so ways of doing it:
(a) how many ways would an individual do it without repeating and would a pattern emerge.
(b) would this pattern be similar between individuals.
Regards
Colin
I think there are 4 basic types of Lotto Players.
1. Quick Pick Players the overwhelming majority.
2. Random Selectors filling in the Entry Form in whatever imaginative way their brain tells them.
3. Those that play the same numbers derived from birthdays etc,
4 That small minority (myself included) who like to fill in the entry form in some constrained way by considering the numbers.
No 2 has always interested me because from the 8,000,000 million or so ways of doing it:
(a) how many ways would an individual do it without repeating and would a pattern emerge.
(b) would this pattern be similar between individuals.
Regards
Colin