If you’ve already bought your ticket for this year’s UQES Ball, then congratulations on maximising your utility! If not, I’m afraid to inform you that you exhibit signs of being an irrational decision maker.
Now, we economists love our models (economics models, that is…) In the formation of these models, it’s necessary to rely on several core assumptions, such as rational behaviour. However, as we all know, human beings aren’t always the most rational of creatures.
Let’s take a journey back to 1913. It was a typical night of grandeur and excitement at the Monte Carlo Casino when people started to notice something rather strange – a roulette ball hadn’t landed on red in quite some time. Crowds began to gather and interest grew with spectators confused as to why the run of blacks continued. Convinced that a red was overdue, people started betting ever more aggressively against black. It wasn’t until after 26th consecutive black number that it landed on red. That night patrons lost millions and the gambler’s fallacy conceived.
In their assessment, noted psychologist Amos Tversky and Nobel Prize winner Daniel Kahnemen proposed that the gambler’s fallacy is the result of a misconception of chance. They found that, in general, people saw chance as a “self-correcting process where a deviation in one direction induces a deviation in the opposite direction to restore the equilibrium”. In other words, gambler’s saw the string of blacks as an imbalance which would soon be self-corrected by the occurrence of a red, seeing as they had an equal theoretical probability.
Away from the betting tables, it’s not uncommon to hear the gambler’s fallacy infect our language. If you’ve ever heard someone make the claim that ‘lightning doesn’t strike twice in the same place’, then congratulations, you’ve heard of the gambler’s fallacy.
As demonstrated by the gambler’s fallacy, it’s clear that even the best amongst us can make illogical and ill-conceived decisions. With, drinks, food, entertainment, quality company, oh and did I mention drinks, the 2018 UQES Ball is guaranteed to be a great time, so why wouldn’t you attend? Lucky for all of you irrational decision makers out there, there’s still some tickets available here!
Written by Suzanne Wong