I Don't Think So!

Good work, initiate. By thinking about the situation rationally, you have avoided the Gambler's Fallacy. 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. You know that the ball landing on red in previous spins does not affect what the ball will do in the next round. Every spin is a random trial and has a 48.6% chance of landing on either black or red (due to the small chance of landing on zero).

To help Mr. Gamble make a sound bet, you decide to utilize 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, .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.

After you share this information with Mr. Gamble, he makes a modest bet of $20 on black. Even though the ball landed on red again, Gamble is revealed that he only lost a small portion of his budget. He thanks you for the advice, but to your dismay, makes his way to the Blackjack table.

Here we go again.