Predicting Lotto Numbers: A natural experiment on the gambler’s fallacy and the hot hand fallacy
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Predicting Lotto Numbers : A natural experiment on the gambler’s fallacy and the hot hand fallacy. / Suetens, Sigrid; Galbo-Jørgensen, Claus B.; Tyran, Jean-Robert Karl.
I: Journal of the European Economic Association, Bind 14, Nr. 3, 2016, s. 584-607.Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
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TY - JOUR
T1 - Predicting Lotto Numbers
T2 - A natural experiment on the gambler’s fallacy and the hot hand fallacy
AU - Suetens, Sigrid
AU - Galbo-Jørgensen, Claus B.
AU - Tyran, Jean-Robert Karl
N1 - JEL codes: D03, D81, D84
PY - 2016
Y1 - 2016
N2 - We investigate the ‘law of small numbers’ using a data set on lotto gambling that allows us to measure players’ reactions to draws. While most players pick the same set of numbers week after week, we find that those who do change react on average as predicted by the law of small numbers as formalized in recent behavioral theory. In particular, players tend to bet less on numbers that have been drawn in the preceding week, as suggested by the ‘gambler’s fallacy’, and bet more on a number if it was frequently drawn in the recent past, consistent with the ‘hot-hand fallacy’.
AB - We investigate the ‘law of small numbers’ using a data set on lotto gambling that allows us to measure players’ reactions to draws. While most players pick the same set of numbers week after week, we find that those who do change react on average as predicted by the law of small numbers as formalized in recent behavioral theory. In particular, players tend to bet less on numbers that have been drawn in the preceding week, as suggested by the ‘gambler’s fallacy’, and bet more on a number if it was frequently drawn in the recent past, consistent with the ‘hot-hand fallacy’.
KW - Faculty of Social Sciences
KW - D03
KW - D81
KW - D84
U2 - 10.1111/jeea.12147
DO - 10.1111/jeea.12147
M3 - Journal article
VL - 14
SP - 584
EP - 607
JO - Journal of the European Economic Association
JF - Journal of the European Economic Association
SN - 1542-4774
IS - 3
ER -
ID: 138131505