Residential College | false |
Status | 已發表Published |
The cross-sectional "Gambler's Fallacy": Set representativeness in lottery number choices | |
Lien,Jaimie W.1; Yuan,Jia2 | |
2015 | |
Source Publication | Journal of Economic Behavior and Organization |
ABS Journal Level | 3 |
ISSN | 01672681 |
Volume | 109Pages:163-172 |
Abstract | Traditionally, the Gambler's Fallacy is described as the belief that a sequence of independent outcomes over time should exhibit short-run reversals. The underlying psychological bias thought to drive this fallacy is Representativeness Bias: the idea that even a small sample of outcomes should closely reflect the theoretical probability distribution (. Tversky and Kahneman, 1971). Yet representativeness also has less commonly explored consequences in the cross-sectional dimension. We find strong evidence for this in lottery play where probabilities are well-defined and transparent, using a dataset of over 1.6 million lottery tickets purchased by over 28,000 players. Specifically, individuals prefer number combinations that are cross-sectionally representative of the uniform distribution from which they are drawn. We test two possible approaches to implementing representativeness; a heuristic 3-bin approach which is promoted in some gambling advice literature, and a direct optimization approach in which gamblers try to spread the numbers in the chosen set as evenly as possible across the lottery number range. By both measures, gamblers over-gravitated to highly representative lottery number sets and over-avoided less representative sets, compared to the proportions that the true lottery odds would suggest. In this pari-mutuel lottery setting, a cost is incurred by gamblers with this type of bias, by reducing their expected winnings. |
Keyword | Belief Biases Gambler's Fallacy Lottery Gambling Representativeness Bias |
DOI | 10.1016/j.jebo.2014.10.011 |
URL | View the original |
Indexed By | SSCI |
Language | 英語English |
WOS Research Area | Business & Economics |
WOS Subject | Economics |
WOS ID | WOS:000349502700012 |
Scopus ID | 2-s2.0-84914817418 |
Fulltext Access | |
Citation statistics | |
Document Type | Journal article |
Collection | DEPARTMENT OF FINANCE AND BUSINESS ECONOMICS |
Corresponding Author | Lien,Jaimie W. |
Affiliation | 1.Department of Economics,School of Economics and Management,Tsinghua University,,China 2.Department of Business Economics,Faculty of Business Administration,University of Macau,,Macao |
Recommended Citation GB/T 7714 | Lien,Jaimie W.,Yuan,Jia. The cross-sectional "Gambler's Fallacy": Set representativeness in lottery number choices[J]. Journal of Economic Behavior and Organization, 2015, 109, 163-172. |
APA | Lien,Jaimie W.., & Yuan,Jia (2015). The cross-sectional "Gambler's Fallacy": Set representativeness in lottery number choices. Journal of Economic Behavior and Organization, 109, 163-172. |
MLA | Lien,Jaimie W.,et al."The cross-sectional "Gambler's Fallacy": Set representativeness in lottery number choices".Journal of Economic Behavior and Organization 109(2015):163-172. |
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