Predicting Outcomes in a Sequence of Binary Events: Belief Updating and Gambler's Fallacy Reasoning.

ABSTRACT: Beliefs like the Gambler's Fallacy and the Hot Hand have interested cognitive scientists, economists, and philosophers for centuries. We propose that these judgment patterns arise from the observer's mental models of the sequence-generating mechanism, moderated by the strength of belief in an a priori base rate. In six behavioral experiments, participants observed one of three mechanisms generating sequences of eight binary events: a random mechanical device, an intentional goal-directed actor, and a financial market. We systematically manipulated participants' beliefs about the base rate probabilities at which different outcomes were generated by each mechanism. Participants judged 18 sequences of outcomes produced by a mechanism with either an unknown base rate, a specified distribution

SUBMITTER: Rao K 

PROVIDER: S-EPMC10078382 | biostudies-literature | 2023 Jan

REPOSITORIES: biostudies-literature