Featured Research

from universities, journals, and other organizations

Roots of gamblers' fallacies and other superstitions: Causes of seemingly irrational human decision-making

Date:
August 31, 2010
Source:
University of Minnesota
Summary:
Gamblers who think they have a "hot hand," only to end up walking away with a loss, may nonetheless be making "rational" decisions, according to new research.

Gamblers who think they have a "hot hand," only to end up walking away with a loss, may nonetheless be making "rational" decisions, according to new research from University of Minnesota psychologists. The study finds that because humans are making decisions based on how we think the world works, if erroneous beliefs are held, it can result in behavior that looks distinctly irrational.

Related Articles


This research, forthcoming in the Proceedings of the National Academy of Sciences (PNAS) "Early Edition," examines the roots of a seemingly irrational human decision strategy that occurs in so-called binary choice tasks, which has perplexed researchers in economics, psychology and neuroscience for decades. In these tasks, subjects are repeatedly asked to choose between two options, with one option having a higher probability of being correct than the other (imagine a biased coin that will land on heads 70 percent of trials, and tails on 30 percent of trials). While the right strategy is to always pick the higher probability option, subjects instead choose the options in proportion to the probability of it being correct.

"The overarching idea is that there is typically structure in the world, and it makes sense that when we make decisions, we try to understand the structure in order to exploit it," says Shawn Green, a post-doctoral fellow in the College of Liberal Arts' Department of Psychology and Center for Cognitive Sciences. "One of the simplest kinds of 'structure' is when the outcome that just occurred tells you something about what is likely to happen next."

"Where people go astray is when they base their decisions on beliefs that are different than what is actually present in the world," says Green. "In the coin example, if you toss a coin five times and all five times are heads, should you pick heads or tails on the next flip? Assuming the coin is fair, it doesn't matter -- the five previous heads don't change the probability of heads on the next flip -- it's still 50 percent -- but people nevertheless act as though those previous flips influence the next one."

Green says when things are actually independent over time, meaning they don't have any structure, people will interpret results through possible structures, a way of thinking often seen among gamblers. For example, gamblers who win three hands in a row, may believe themselves to be "hot" and thus more likely to win the next hand. Green, with advisors Daniel Kersten and Paul Schrater, showed that similar behaviors are seen even in an optimal, fully rational computer learner given similar incorrect beliefs about the world.

Furthermore, when the context of the task was changed so that subjects understood that the outcomes were actually independent, a drastic shift in their behavior was noted, with subjects all doing the "right" thing for the way the world actually worked.

"This demonstrates that given the right world model, humans are more than capable of easily learning to make optimal decisions," Green says.

The paper "Alterations in choice behavior by manipulations of world model," forthcoming in the Proceedings of the National Academy of Sciences (PNAS), was co-authored by C. Shawn Green, Charles Benson, Daniel Kersten and Paul Schrater in the Department of Psychology, College of Liberal Arts, University of Minnesota.


Story Source:

The above story is based on materials provided by University of Minnesota. Note: Materials may be edited for content and length.


Journal Reference:

  1. C. S. Green, C. Benson, D. Kersten, P. Schrater. Alterations in choice behavior by manipulations of world model. Proceedings of the National Academy of Sciences, 2010; DOI: 10.1073/pnas.1001709107

Cite This Page:

University of Minnesota. "Roots of gamblers' fallacies and other superstitions: Causes of seemingly irrational human decision-making." ScienceDaily. ScienceDaily, 31 August 2010. <www.sciencedaily.com/releases/2010/08/100830152534.htm>.
University of Minnesota. (2010, August 31). Roots of gamblers' fallacies and other superstitions: Causes of seemingly irrational human decision-making. ScienceDaily. Retrieved October 25, 2014 from www.sciencedaily.com/releases/2010/08/100830152534.htm
University of Minnesota. "Roots of gamblers' fallacies and other superstitions: Causes of seemingly irrational human decision-making." ScienceDaily. www.sciencedaily.com/releases/2010/08/100830152534.htm (accessed October 25, 2014).

Share This



More Mind & Brain News

Saturday, October 25, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Academic Scandal Shocks UNC

Academic Scandal Shocks UNC

AP (Oct. 23, 2014) A scandal involving bogus classes and inflated grades at the University of North Carolina was bigger than previously reported, a new investigation found. (Oct. 23) Video provided by AP
Powered by NewsLook.com
Working Mother Getaway: Beaches Turks & Caicos

Working Mother Getaway: Beaches Turks & Caicos

Working Mother (Oct. 22, 2014) Feast your eyes on this gorgeous family-friendly resort. Video provided by Working Mother
Powered by NewsLook.com
What Your Favorite Color Says About You

What Your Favorite Color Says About You

Buzz60 (Oct. 22, 2014) We all have one color we love to wear, and believe it or not, your color preference may reveal some of your character traits. In celebration of National Color Day, Krystin Goodwin (@kyrstingoodwin) highlights what your favorite colors may say about you. Video provided by Buzz60
Powered by NewsLook.com
First-Of-Its-Kind Treatment Gives Man Ability To Walk Again

First-Of-Its-Kind Treatment Gives Man Ability To Walk Again

Newsy (Oct. 21, 2014) A medical team has for the first time given a man the ability to walk again after transplanting cells from his brain onto his severed spinal cord. Video provided by Newsy
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:

Strange & Offbeat Stories


Health & Medicine

Mind & Brain

Living & Well

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins