The Gambler's Fallacy (The key to unbiased gambling)

[fortunecrypto]

We're definitely not bad at gambling.

He might not able to see it yet he do generalize in all sorts of things when it comes to gambling.Even on the simplest decision

in life do correspond some sort of gamble which we would really need up to make such selection into things.

False, humans are awful at gambling: it’s a scientific fact whether you like it or not. It’s the reason casinos do so well and why the casino business is a billion dollar industry. Here is one of many huge articles containing numerous studies highlighting the psychology behind gambling.

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3858640/

I agree, you cannot bring the house down however you try, there are few that are going to be lucky in a game of gambling in a particular day but the majority will have bad luck playing games, our government is right to create more casinos in our country it's a good revenue-generating venture

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[Fredomago]

What makes you say that humans are very bad at gambling?

Throughout our evolution, we as a species have had to make several extremely risky gambles that have paid off, I wouldn't say that we're bad at gambling.

We had to risk crossing the oceans to find new lands, we had to risk overthrowing and electing certain leaders and we've had to wage wars we might not have won.

We're definitely not bad at gambling.

I agree, we are not that bad at gambling, I think the things that make it bad is when the gambler got addicted and don’t know how to control himself at the game and that they forgot about the plan.

Being too emotional leads the gamblers to lose more, as they keep following emotions from game after game that they've played, if you can hold your
emotions and deal with this activity with good form and right attitude you'll not going to find yourself being too much addicted it will not ruin your life and you can easily go and move forward every time you deal with this activities whatever the results.

[Patatas]

Assuming that the games are probably fair, the streaks but law of probability eventually  have to even out. You are just as likely to lose 10 in a row than to win 10 in a row assuming that odds are 50-50. I dont understand how that is a fallacy can anyone help me understand why it is wrong to think?

Probably fair? We shouldn't be using that term at all. You know it, games are provably fair and not probably. The entire fallacy wouldn't make sense if a player is betting on a rigged site. On provability fair games, the probability may or may not even out.

[Aero Blue]

This is a very good idea and not bias on us gamblers, we become bad in gambling into other eyes because they know that gambling might get you addicted gamblers if you don't know how to handle with it perhaps better to quit in gambling. One of the best aspects of gambling addiction is to chase profit on gambling which is a very bad idea. Gamble that you can afford and enjoy every moment that you are in gambling site because it's a cool and wise move.

This is the thinking of ordinary people who don’t understand gambling, they see people who goes to casinos are bad but we can’t deny the fact that a lot of gamblers becomes addict as well. Gamble excess money, stay fit and always have fun. Gambling is not always take profit, its bad if you do bad decisions and take more greed.

Exactly. When it all comes down to it, gambling is just a form of entertainment. Just like spending $20 to go see a movie, some people prefer to play a hand or two. If you do everything in moderation then you will never have an issue.

[yvesp110]

This is a very good idea and not bias on us gamblers, we become bad in gambling into other eyes because they know that gambling might get you addicted gamblers if you don't know how to handle with it perhaps better to quit in gambling. One of the best aspects of gambling addiction is to chase profit on gambling which is a very bad idea. Gamble that you can afford and enjoy every moment that you are in gambling site because it's a cool and wise move.

This is the thinking of ordinary people who don’t understand gambling, they see people who goes to casinos are bad but we can’t deny the fact that a lot of gamblers becomes addict as well. Gamble excess money, stay fit and always have fun. Gambling is not always take profit, its bad if you do bad decisions and take more greed.

Exactly. When it all comes down to it, gambling is just a form of entertainment. Just like spending $20 to go see a movie, some people prefer to play a hand or two. If you do everything in moderation then you will never have an issue.

Exactly, this reminds me of the physiocratic fallacy as well. Anyways, it is well said that gambling is just investment for entertainment. It is better to enjoy the game rather than expecting for money in the game. You might get occasional money as well but on the average, a normal man lose more than he win. In sports gambling, you might make some money but I am not really sure about poker and others.

[Saint-loup]

What is the Gambler's Fallacy?

Wikipedia has an awesome ELI 5:

"Gambler’s fallacy arises out of a belief in the law of small numbers, or the erroneous belief that small samples must be representative of the larger population. According to the fallacy, “streaks” must eventually even out in order to be representative." - Wikipedia Page


A simple example:

I see people fall victim to this train of thought so often, and a lot of the times it's the reason they fail at gambling. Here is a common example that I see around here a lot:

     - Most people can agree that if you flip a coin, it's 50/50 for heads or tails respectively.

     - Now, take this scenario: "You lose 20 coin flips in a row, what are your odds to win the next one?"

If you think that your odds are any different than 50/50 for the 21st coin flip, then you have fallen victim to this fallacy.

Individually it's very easy to understand the odds for one event, but once you introduce more data it gets a lot harder to tell.

I disagree with that if you bet 20times on the same side and you lose, the odds are not the same for the next flip (if the flips are really random).
It doesn't mean you'll have 100% chances to win but you'll have more than 50% chances to win...

Assuming that the games are probably fair, the streaks but law of probability eventually  have to even out. You are just as likely to lose 10 in a row than to win 10 in a row assuming that odds are 50-50. I dont understand how that is a fallacy can anyone help me understand why it is wrong to think?

It's the idea that the previous results change the odds on the next. In your mind if 9 are tails in a row you think it just can't be tails in a row that would be insane and think of it as a 1/10 result and 10% chance but it's really 50/50.

How do you explain that then?


On 50 000 runs of 32 flips, 0 runs gave less than 6 heads. But more than 7000 gave exactly 16 heads and 16 tails...
So you have more chances to get 9 tails and 1heads or 5tails and 5heads?

[Aero Blue]

...

I disagree with that if you bet 20times on the same side and you lose, the odds are not the same for the next flip (if the flips are really random).
It doesn't mean you'll have 100% chances to win but you'll have more than 50% chances to win...

The odds don't change at all based on streaks, because people often think parts need to be representative of the whole leading to the erroneous belief that streaks must even out.

You can disagree all you want, but it's a statistical fact. You are more inclined to think that the odds are different because your brain tries to play tricks on you.

[Saint-loup]

...

I disagree with that if you bet 20times on the same side and you lose, the odds are not the same for the next flip (if the flips are really random).
It doesn't mean you'll have 100% chances to win but you'll have more than 50% chances to win...

The odds don't change at all based on streaks, because people often think parts need to be representative of the whole leading to the erroneous belief that streaks must even out.

You can disagree all you want, but it's a statistical fact. You are more inclined to think that the odds are different because your brain tries to play tricks on you.

No the gaussian law says that the expected probability tends to be respected if the game is really random.
Look at the chart above.

[Aero Blue]

...

I disagree with that if you bet 20times on the same side and you lose, the odds are not the same for the next flip (if the flips are really random).
It doesn't mean you'll have 100% chances to win but you'll have more than 50% chances to win...

The odds don't change at all based on streaks, because people often think parts need to be representative of the whole leading to the erroneous belief that streaks must even out.

You can disagree all you want, but it's a statistical fact. You are more inclined to think that the odds are different because your brain tries to play tricks on you.

No the gaussian law says that the expected probability tends to be respected if the game is really random.
Look at the chart above.

That is again, false. I think you are not realizing the independence of events, here is a good explanation:

"While a run of five heads has a probability of 1/32 = 0.03125 (a little over 3%), the misunderstanding lies in not realizing that this is the case only before the first coin is tossed. After the first four tosses, the results are no longer unknown, so their probabilities are at that point equal to 1 (100%). The reasoning that it is more likely that a fifth toss is more likely to be tails because the previous four tosses were heads, with a run of luck in the past influencing the odds in the future, forms the basis of the fallacy."

To add on a little more, I think you are speaking of statistical regularity "or a notion in statistics and probability theory that random events exhibit regularity when repeated enough times or that enough sufficiently similar random events exhibit regularity. It is an umbrella term that covers the law of large numbers, all central limit theorems and ergodic theorems."

It is commonly confused with the gambler's fallacy:

"This phenomenon should not be confused with the gambler's fallacy, because regularity only refers to the (possibly very) long run. The gambler's fallacy does not apply to statistical regularity because the latter considers the whole rather than individual cases."

[buwaytress]

Which is why, when I am on a joy ride of martingale, I don't think of streaks nor do I think of # of bets, nor do I think of changing my targets as I get closer to them. I generally have a capital, a fixed target, and then I go on the joy ride, martingaling, and then allowing 1 of 2 things to happen: I bust because that maximum losing streak has hit me, or I achieve my target and get in profit.

I've been asked about the latter and yes I could simply get the same result in 1 bet (and probability is the same!) but this way, I gain more wagering amounts, which generally gives me some edge later.

The point is, I know that no matter how many times I bust, doesn't affect my probability for the next round. And conversely, I could always get in profit and never bust, because I will never gamble enough to achieve a large enough sample =)

[Aero Blue]

Which is why, when I am on a joy ride of martingale, I don't think of streaks nor do I think of # of bets, nor do I think of changing my targets as I get closer to them. I generally have a capital, a fixed target, and then I go on the joy ride, martingaling, and then allowing 1 of 2 things to happen: I bust because that maximum losing streak has hit me, or I achieve my target and get in profit.

I've been asked about the latter and yes I could simply get the same result in 1 bet (and probability is the same!) but this way, I gain more wagering amounts, which generally gives me some edge later.

The point is, I know that no matter how many times I bust, doesn't affect my probability for the next round. And conversely, I could always get in profit and never bust, because I will never gamble enough to achieve a large enough sample =)

Employing betting strategies (such as a martingale) cannot alter the odds in the long run. However, as you said: you are never going to gamble enough to achieve a large enough sample. You are legitimately the first person I have met who understands martingale and the odds, but still uses the method. Good luck on those joy rides

[buwaytress]

Which is why, when I am on a joy ride of martingale, I don't think of streaks nor do I think of # of bets, nor do I think of changing my targets as I get closer to them. I generally have a capital, a fixed target, and then I go on the joy ride, martingaling, and then allowing 1 of 2 things to happen: I bust because that maximum losing streak has hit me, or I achieve my target and get in profit.

I've been asked about the latter and yes I could simply get the same result in 1 bet (and probability is the same!) but this way, I gain more wagering amounts, which generally gives me some edge later.

The point is, I know that no matter how many times I bust, doesn't affect my probability for the next round. And conversely, I could always get in profit and never bust, because I will never gamble enough to achieve a large enough sample =)

Employing betting strategies (such as a martingale) cannot alter the odds in the long run. However, as you said: you are never going to gamble enough to achieve a large enough sample. You are legitimately the first person I have met who understands martingale and the odds, but still uses the method. Good luck on those joy rides

Why thank you! Ever since bitcoin dice came around along with the ability to roll millions of rolls in weeks, I've been enjoying martingaling. Of course, lower house edges, microbetting, all these allow for 20+ streaks that regular roulette never could. Amazing if you think about what a relatively simple script and a new currency could do to change things up! Oh and racking up wagering amounts along the way.

It's all for fun in the end, and it has been fun thus far, and we really need to come to terms (and in my case, happily embrace it) with what it is to really enjoy it =D

Thanks and see you on the other side of gambler's fallacy

[Botnake]

Humans are naturally very bad at gambling, mainly because we suffer from many biases that feed off of each other.

This is somehow true, we have to be aware and accept this reality so we can do the right action in gambling.
When we gamble with our emotion, that will make us fail, we should learn to control our emotion and always focus on the method and learn to correctly implement it throughout the game. Being realistic is always necessary as this risk can only be seen if we are realistic.

[jake zyrus]

I somehow agree with what you said that "Humans are naturally very bad at gambling". I think what the op is trying to say is that, we are naturally bad at gambling but through learning and practices, we improve and become better. We don't actually born good at gambling. We learn and improve through process. And during that process, we also learn to make better decision to avoid losses.

[davis196]

I understand this theory but,to oversimplify things a little bit,the more you gamble the bigger the chance of losing everything.
What differentiates a good gambler from a bad gambler is the fact that the good gambler knows when to stop,while the bad gambler just wants more and more,and eventually he loses everything.
It's all about self-control and psychology,not mathematics.

[iMark]

We're definitely not bad at gambling.

He might not able to see it yet he do generalize in all sorts of things when it comes to gambling.Even on the simplest decision

in life do correspond some sort of gamble which we would really need up to make such selection into things.

Yeah we can't generalize that we are bad at gambling just because of the possibility of bias happening in gambling. many players are profit in gambling just by guessing, and not always gambling results are biased, poker can guarantee profits if you are skilled, sport betting does not give big chance of losses because we are able to analyze the match, the point is we are not always bad at gambling

[Ryker1]

I understand this theory but,to oversimplify things a little bit,the more you gamble the bigger the chance of losing everything.
What differentiates a good gambler from a bad gambler is the fact that the good gambler knows when to stop,while the bad gambler just wants more and more,and eventually he loses everything.
It's all about self-control and psychology,not mathematics.

Well, only greed people will do that. Once you are a gambler just always avoiding the matter that you can't control your self and finding more and more profit and eventually keep losing because of chasing profit and that is a bad gambler. The fact that that kind of attitude makes them self worst if they are turning into addiction in gambling. Indeed, just be a good gambler and that is the real fallacy if you are that kind of gambler not gambling itself.

[Aero Blue]

I understand this theory but,to oversimplify things a little bit,the more you gamble the bigger the chance of losing everything.
What differentiates a good gambler from a bad gambler is the fact that the good gambler knows when to stop,while the bad gambler just wants more and more,and eventually he loses everything.
It's all about self-control and psychology,not mathematics.

Well, only greed people will do that. Once you are a gambler just always avoiding the matter that you can't control your self and finding more and more profit and eventually keep losing because of chasing profit and that is a bad gambler. The fact that that kind of attitude makes them self worst if they are turning into addiction in gambling. Indeed, just be a good gambler and that is the real fallacy if you are that kind of gambler not gambling itself.

One piece of advice that I can offer in order make "unbiased gambling" easier, is to acknowledge the fact that the money you put in is already gone. For example, if I ever deposit: I imagine that I no longer own the money anymore, usually it makes it easier to accept loses if you already accept it.

[Ucy]

Well, we fail at gambling because we do not consider the fact that something we do not understand cannot be predicted. This is probably why we fail at predicting which side will show when a coin is flipped...  we simply don't know the factors that make a coin fall on a particular side and not the other.
However we are good at predicting things without too much randomness and things with patterns we are familiar with.   Examples of things we can predict a little bit are humans/animals behaviour and other non random things. This explains why human to human gambling is more predictable and considered skill-based gambling than throwing coin randomly

[Saint-loup]

None of the previous results matter, in that moment the heads or tails is still just 50/50, it doesn't matter what previous results were, the graph doesn't matter, the odds of every single flip regardless was 50/50, this is where the human mind wands to throw that out the window.

...

I disagree with that if you bet 20times on the same side and you lose, the odds are not the same for the next flip (if the flips are really random).
It doesn't mean you'll have 100% chances to win but you'll have more than 50% chances to win...

The odds don't change at all based on streaks, because people often think parts need to be representative of the whole leading to the erroneous belief that streaks must even out.

You can disagree all you want, but it's a statistical fact. You are more inclined to think that the odds are different because your brain tries to play tricks on you.

No the gaussian law says that the expected probability tends to be respected if the game is really random.
Look at the chart above.

That is again, false. I think you are not realizing the independence of events, here is a good explanation:

"While a run of five heads has a probability of 1/32 = 0.03125 (a little over 3%), the misunderstanding lies in not realizing that this is the case only before the first coin is tossed. After the first four tosses, the results are no longer unknown, so their probabilities are at that point equal to 1 (100%). The reasoning that it is more likely that a fifth toss is more likely to be tails because the previous four tosses were heads, with a run of luck in the past influencing the odds in the future, forms the basis of the fallacy."

I'm sorry but your unsourced statement doesn't prove anything.
According to the statistics you have more chances to get 5heads and 5tails than getting 0heads and 10tails when you flip 10times a coin. Do you agree with that? Yes or no?

According to the same statistics you have more chances to get 1heads and 9tails than getting 0heads and 10tails.
Do you agree with that? Yes or no?

So if you got already 9tails, you have more chances to get a heads than getting a tails because there are statistically more chances to get 1heads and 9tails in a series of 10 flips than getting 0heads and 10tails.
This is as simple as that.