What is the 'gambler's fallacy' and how does it affect decision-making?
The gambler's fallacy is a cognitive bias where individuals believe that past independent events affect the probabilities of future independent events. For example, if a coin is flipped and lands on heads multiple times in a row, people may think that tails is 'due' to occur, despite each flip being an independent event with a 50% chance for heads or tails. This fallacy can lead to poor decision-making, especially in gambling scenarios, where individuals may make bets based on perceived patterns rather than actual probabilities.
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