Skeptic’s Dictionary Definition: "The gambler’s fallacy is the mistaken notion that the odds for something with a fixed probability increase or decrease depending upon recent occurrences.”
The Investopedia definition:“When an individual erroneously believes that the onset of a certain random event is less likely to happen following an event or a series of events.”
The Internet Encyclopedia of Philosophy definition: “This fallacy occurs when the gambler falsely assumes that the history of outcomes will affect future outcomes.”
All of these definitions are entirely circular, and I like the last one the best because the gambler's fallacy can simply be boiled down to basing a decision on false assumptions. Why do players make these false assumptions? One cited explanation was given in 1974 by Amos Tversky and Daniel Kahneman. They claim that people use a representativeness heuristic, where they judge events by the data that is available to them. Mostly short run information. This short run information rarely resembles the long term properties of the random events. Humans didn’t evolve in casinos. We evolved in environments where we did see patterns and recognizing those patterns helped us to survive. Think about hunting and the tendencies of certain animals in the search for food or habitat. Think about knowing that the weather changes each season and that it happens every year in the same way or the moon cycles or the sun’s position in the ski. Looking for a pattern and predicting the future has always been an important part of our evolution.
There are proven studies that chronicle the known power of the placebo effect, and this is the same mind and body altering effect that the GFD creates. Even though the information given (like a placebo) is inert, it gives the player a boost of perceived intuition and confidence that would not have occurred without the information provided by the device. There are also studies that suggest that people with higher cognitive abilities (intelligence and executive function) are more likely to engage in the Gambler’s Fallacy Strategy when given quality information and a strategy to use.
To learn more about the Device and to receive a full description....Contact Craig Ball here.