Predicting Lotto Numbers A natural experiment on the gambler’s fallacy and the hot hand fallacy
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چکیده
We investigate the “law of small numbers” using a data set on lotto gambling that allows us to measure players’ reactions to draws. While most players pick the same set of numbers week after week, we find that those who do change, react on average as predicted by the law of small numbers as formalized in recent behavioral theory. In particular, players tend to bet less on numbers that were drawn in the last week, as suggested by the “gambler’s fallacy”, and bet more on a number if it was frequently drawn in the recent past, consistent with the “hot hand fallacy”. JEL Codes: D03, D81, G02
منابع مشابه
Judgment Error in Lottery Play: When the Hot-Hand Meets the Gambler’s Fallacy
We demonstrate that lottery players can be influenced to believe erroneously in the existence of “hot” numbers, where past winning numbers are perceived to have a greater probability of winning in future draws, even though past and the future events are independent. The existence of this “hot-hand” effect in lottery games is surprising, as works by Clotfelter and Cook (1993) and Terrell (1994) ...
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تاریخ انتشار 2012