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.
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JEL Classification: C9 Experimental, C93 Field Experiments, D81 Decision Making under Risk and Uncertainty
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Croson, R., Sundali, J. The Gambler’s Fallacy and the Hot Hand: Empirical Data from Casinos. J Risk Uncertainty 30, 195–209 (2005). https://doi.org/10.1007/s11166-005-1153-2
- perceptions of randomness
- field study