Gambler’s Fallacy vs Hot Hand Fallacy | A Complete Guide

If you are a regular gambler then chances are high that you have someday or other fallen in trap of Gambler’s Fallacy Vs Hot Hand Fallacy. Both of these are cognitive biases and quite evident in gambling as well as economics. These fallacies are on the opposite end of the spectrum. While hot hand fallacy believes the continuous occurrence of any event increases its probability of happening even more. Gambler’s fallacy on the other hand believes that continuous occurrence of an event decreases its probability of happening. Over the years, Many gamblers who believe in luck more than they believe in skills, have popularized these fallacies. This has almost become a generational belief in gambling.

Gambler’s Fallacy Vs Hot Hand Fallacy- Basics Explained

Hot hand fallacy happens only when the gamblers think that the winning streak is quite high and will continue in the long run. This happens when the player has already won a number of bets and it is very likely that they will continue to win the next moves as well. Winning a bet increases the probability to win even more. In simple words, once a player can establish a winning streak, it will increase the probability of them winning even more.

On the other hand, the gambler’s fallacy works in the reverse direction. This means that once a player starts losing a hand, there is a high chance that their luck will turn around after some time and they will start winning. The logic behind gambler’s fallacy is that, getting the same outcome in the game decreases the probability of that same outcome in the future.

While in hot hand fallacy, the idea is that getting an outcome repeatedly increases its probability of occurring in the next streaks. Whereas, in the gambler’s fallacy, getting an outcome repeatedly is expected to reduce the probability of that outcome happening in future streaks.

Gambler’s Fallacy Vs. Hot Hand Fallacy- Reality

You might be thinking why both of these are labeled as fallacies and not any other move or hand. The precise reason is that – both of these are matters of chance and in reality, this is just an assumption. Scientifically speaking, every move in the gambling game is independent of the previous or next moves. They all occur independently and do not influence any future move. Each time the dice is rolled, they result in completely independent outcomes and all of that starts from scratch.

This independent nature of gambling simply indicates that there is nothing called game streak. Even if you win bets six or seven times in a row, there is no guarantee that you will win the seventh time. Hot hand fallacy says if you win the first couple of bets, you will keep on winning and gambler’s fallacy says that if you lose the first couple of bets, your probability of winning increases. The dichotomy of Gambler’s Fallacy Vs. Hot Hand Fallacy itself is faulty.

Plenty of research has been done in this regard comparing Gambler’s Fallacy Vs. Hot Hand Fallacy to understand the real logic behind these. Statistics have proved there is no practical evidence to believe in these. But many gamblers believe in these fallacies from the core of their heart and also implement them as strategies for betting and winning.

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Should You Believe in Gambler’s Fallacy Vs. Hot Hand Fallacy?

Hot hand fallacy is mostly discussed in sports betting. Once money is involved, people start believing all these myths. For example, when betting on any sports event like cricket, the gamblers start to believe that the player who has won maximum runs in the first minutes of the game is the one who will probably win the game. This makes them believe that it is best to bet on these players. While if a player has not been able to perform adequately during the first minutes, they have high chances of failure. However, in reality, a player starting to perform better from the mid match is quite a common incident. Hot hand fallacies often influence public reasoning and develop incorrect reasoning.

Pro gamblers never believe in hot hand fallacy or gambler’s fallacy since both of these falter our reasoning capacity. So, even before making any decisions or betting with the concept of these two fallacies we should really question or judge and rationale. Emotions overrule facts especially when the question of betting and earning more money is involved. Gambler’s Fallacy Vs. Hot Hand Fallacy is another example of cognitive behavioral biases in the world of betting.

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