The Monte Carlo Fallacy -Mental Model 025
The mistaken belief that if something happens more frequently than normal during some period, it will happen less frequently in the future.
Or that if something happens less frequently than normal during some period, it will happen more frequently in the future.
Example: At the Monte Carlo Casino on August 18, 1913, the ball fell on black 26 times in a row. While this is statistically an extremely rare event, it is no rarer than any other the other 67,108,863 possible sequences of red and black.
Gamblers at the Monte Carlo lost millions of francs betting against black, incorrectly thinking that the streak was causing an ‘imbalance’ in the randomness of the wheel, and surely it had to be followed by a long streak of red.
Aka: Gambler’s Fallacy, Fallacy of the Maturity of Chances
Wisdom: “I am not in the position to sacrifice the necessary in the hope of winning the superfluous.” ― Alexander Pushkin
Originally published at tomchanter.blog on October 19, 2017.