Gambler’s fallacy, also known as the Monte Carlo fallacy theorises that an occurrence is more or less likely to occur because of a previous occurrence.
The most famous documented example of gambler’s fallacy was a game of roulette at the Monte Carlo casino in 1913. In this game of roulette, black was spun 26 times in a row. During this streak, gamblers lost millions betting on red. Why? Because the streak ‘had to end’ and a streak of red would need to occur to correct the imbalance.
What is it?
Gambler’s fallacy is essentially a psychological prediction which ignores the statistics of the situation.
Using a coin flipping experiment as an example, from a statistical point of view every single flip of a coin has a 50/50 chance of landing on heads or tails. While streaks are more and more unlikely as the same result keeps appearing, it does not change the fact that there is still a 50/50 chance of either result at each flip.
A person with a gambler’s fallacy mindset would believe that after 9 heads have been flipped in a row, a tail is ‘due’. It does not enter their mind that it is still a 50/50 chance to occur.
There are of course exceptions to this rule. For example, after 9 heads, a weighted coin which favours heads will be more likely to turn up a head on the 10th flip. If the gambler has this information, it is not gambler’s fallacy but an educated decision.
Reverse fallacy is again very psychological, but is the opposite of gambler’s fallacy. Essentially a gambler sees a result constantly occurring and believes it will continue to occur.
For example, if black appeared on a roulette table 10 times in a row a gambler with a reverse fallacy mindset would bet black. This person’s belief is that there is a reason or ‘power’ behind the streak and cannot see any reason to stop betting on black.
A person with this mindset would of made a fortune during the 1913 Monte Carlo streak!
How does this relate to poker?
Gambler’s fallacy is a powerful lesson for any serious poker player to learn. The key is to stay patient, and not tilt because you are in the middle of an unlucky streak.
The cards will even itself out in the long run, so if you are more skilled than the game you are playing, you will win in the long run.
Many poker players will make stupid plays during a bad streak because they believe it cannot continue. Even if your luck is turning around, making bad decisions during a bad run will not yield a long-term profit.
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