by Freddy Tay

Created on: June 04, 2010

Though highly discouraged by the morally good, lottery is actively marketed to people. Exploiting on the very fact on the gambler's fallacy, lottery organisations are able to profit from this lucrative activity. There is, however, a catch, if you will, to playing lottery. That is you open a 'regular savings plan' with the organisation, except that you do not get your savings back. A small portion can go to the pot easily because people probably believe that a negligible amount, to them, buys luck, which is priceless in that sense, therefore, a worthy investment. However, it is often a disillusion. Let us explore why.

The obvious thing that many people will believe is that if you lose too much, you will eventually win someday. Going by probability, that may be true. We can flip a coin, and if for the next three tries, we get heads, we will most likely believe that any further try will give us a tail. This is termed a gambler's fallacy. A reversal of thought for this idea is the reverse gambler's fallacy, which is a belief where the gambler believes that more successful consecutive streaks will only continue, since there is no background that the odds will change.

In a psychological point of view, it is believed to a cognitive bias against the odds. People will, supposedly, believe that a stack of heads will only be a more representative sequence for tail to come than an occurrence of a head. Psychologists often associate this to our representativeness heuristic, that is to say we learn through repetitive representations of some subject. Take for example, the more heads we get, the more we believe that we will get tails in the next turn. An earlier experiment demonstrates this point when a group of people were given a coin each and asked to predict the throw. Knowing that having more of heads, they will tend to predict more tails to balance the probability to 0.5. This can also be seen as a clustering illusion, where people will believe that a random group of events are actually a series of related events.

Given the above knowledge, we can only lament on the fact that people draw their lottery inspiration from their dreams and coincidences in life. Extracting a series of number to strike can only link us back to a clustering illusion of coincidences. An eagerness to strike the lottery will also call upon our heightened sense of representativeness heuristic.

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