Betting It All On Black

If the ball landed on red five times in a row, surely it could not do so again, right? The Gambler's Fallacy explains why it might be tempting to think so. According to Ayton and Fischer (2004), the gambler’s fallacy results from one's expectations that in a series of random events, like the results of a game of roulette, something that has occurred many times in a row is unlikely to occur again. The gambler who falls victim to this heuristic acts under the false assumption that one random event affects the next random event.

To help Mr. Gamble make a sound bet, you could've utilized an Expected Value Model. This model multiplies the value of an event occurring by the probability of it happening in order to determine the actual value of the decision (Goldstein, 2019). The payoff at this casino for betting red or black is one-to-one. If Gamble bets $50.00 and wins, he will win $50.00, which is the "value of the event occurring." Next, you multiply that value by the probability of that event occurring. Because the ball can land on either black, red, or zero on any given spin, the probability of the ball landing on red or black is 48.6%, or .486.

50.00 x .486= 24.3

In other words, Gamble's $50 bet would only have a $24.3 value, since it's more likely to disappear than to be doubled.

Under the influence of the Gambler's Fallacy, Joseph Gamble made a very large bet on black. Naturally, when the ball landed on red again, and Gamble lost a good portion of his budget for the evening, he was quite upset.

Despite your mistake, Gamble still thinks there's hope for you. Don't mess up again, initiate. We're counting on you.

Follow Gamble to the Blackjack Table.