Avoid the gambler's fallacy when assessing probabilities from "summary" of The Art of Thinking Clearly: Better Thinking, Better Decisions by Rolf Dobelli
When it comes to assessing probabilities, it's crucial to steer clear of falling into the trap of the gambler's fallacy. This common cognitive error is rooted in the mistaken belief that past events can influence future outcomes in a random process. For example, if a gambler loses several rounds of a game of chance, they may start to believe that they are "due" for a win and will continue to bet more in hopes of reversing their losses. In reality, each round of the game is independent of the previous ones, and the odds remain the same regardless of past results. This misunderstanding of probability can lead to poor decision-making and significant financial losses. It's essential ...
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