We all have cognitive biases -- errors or faults in the shortcuts our brains take when processing information and making decisions.
Understanding these common biases, especially if they are particularly common in your thought patterns, can help you develop strategies to minimize bias and improve the quality of your decisions.
In this article, we’ll tackle gambler’s fallacy, which sometimes sounds like this: “I’ve had so much bad luck lately that things are bound to turn around.”
What is Gambler’s Fallacy?
Gambler’s fallacy is the false belief that you can predict the outcome of an event based on how a similar event panned out in the past.
For example, if you flip a coin five times in a row and it comes up as tails every time, you may be led to believe that the sixth time will be heads. But in reality, the probability of a coin landing on heads is always 50/50, no matter how the coin landed in the past.
How Can Gambler’s Fallacy Play Into Work and Everyday Life?
The order in which everyday events occur impacts our lives in sometimes profound ways, in and out of work.
In one study, researchers examined the impact of the gambler’s fallacy on loan officers, asylum judges and umpires, with surprising results:
- Loan Officers: This group made the wrong decision on a loan roughly 8 percent of the time, simply because of the order in which they reviewed the applications. For example, if they reviewed several delinquent applications in a row, they would be more likely to approve the next one, and vice versa.
Asylum Judges: The order in which they reviewed their cases affected their decision-making by up to 5 percent.
Baseball Umpires: If the previous pitch was a strike, the umpire was half a percent less likely to call the next pitch a strike.
How might order and sequence affect our decisions in a modern workplace?
Poor decisions based on past events. For example, a manager might hire someone who is unqualified, make a bad investment, or poorly handle a dispute with a colleague or employee.
Feeling entitled. A mindset of entitlement only disempowers you from the responsibility of your results. Gambler’s fallacy gives you the idea that, “I’m due for a raise,” or, “The company owes me that extra vacation time because I’m the last one to leave every day.” In a perfect world, you get the raise and the vacation time because leadership notices the results you’re able to provide. But you aren’t owed anything.
But there’s one more area where gambler’s fallacy can cause trouble: your ability to manage your own performance.
I hear gambler’s fallacy the most in others’ language when they make excuses.
It’s much easier on the psyche to say this:
“I’ve applied to hundreds of jobs without a callback -- it’s a terrible job market.”
In this way, gambler’s fallacy partially serves as a means of self-preservation, because you’re eliminating the sting of failure.
What if, instead, you tried a more truthful statement in which you own the responsibility for your results? Remember, failure is simply determining an ineffective path to the result you want:
“I’ve applied to hundreds of jobs without a callback -- I see that I haven’t discovered the right approach to find work yet.”
“I’ve applied to jobs for months the traditional way without a callback -- what if I tried a different approach?”
The Bottom Line
It’s your responsibility, and yours alone, to create the life you desire.
Nobody owes it to you. No one’s going to hand you a golden opportunity.
You must create the freedom you desire yourself. And that requires hard work.
Whether that’s finding a new job, getting that raise or fighting for more vacation time, it’s up to you to work hard, put in the effort, and try and fail at different methods until you reach your goal. It won’t be easy or comfortable, and there’s no guarantee of success, but your life will truly be yours. And the resilience and courage you’ll build in this process is worth the work.
So how do you begin fighting gambler’s fallacy? The first step is identifying how and when this bias interrupts your rationale, so that you can adjust your thinking when it happens.
5 Ways to Fight Gambler’s Fallacy
Set aside your emotions and analyze data carefully.
Gather all the information, look at the facts and do your best to make a rational decision. Be honest with yourself by proactively thinking of your biases and evaluate them from the start.
In the study on loan officers, the researchers found that when they were given monetary bonuses based on their performance, their error rate fell from eight percent to 1 percent. This also shows that when the officers put in the extra time and reviewed the facts carefully, they were able to overcome their cognitive bias.
Take a break.
Go for a walk, chat with a colleague, or work on something else for a while. Gambler’s fallacy is most likely to occur when patterns are observed within a short period of time. If you’re slogging through a pile of performance reviews, don’t try to get through them in one sitting, or even one day. Spread out the work, so you’re less likely to be influenced by trends.
Also, take note of when you tend to need breaks. If the work is more challenging or of higher significance, set rules from the start to ensure you avoid going on autopilot, which is when you let the biases take over.
Don’t dwell on the past.
While it’s true that we can learn from the past, don’t let it be the deciding factor. Treat every situation as unique. Remember that the past does not determine the future.
Change your behavior.
If you’re on a losing streak, don’t keep doing the same things, betting that your luck will change. Try a different approach. You have more power than you think.