A fascinating new study on online gambling published in this month's issue of Cognition comes to an unexpected conclusion: winning a bet does, seemingly, make you more likely to win your next one. The researchers looked at 565,915 wagers placed by 776 online gamblers in Europe and the U.S., and found that the gamblers had a 48 percent chance to win on average. Once a streak began though, that number dramatically improved:
The paper identifies a interesting mechanism for this effect. Gamblers who won tended to adjust their actions as if they were "due" to lose—they gravitated towards the Gambler's Fallacy over the Hot-Hand Fallacy—and made safer bets that they were more likely to win. The "mean selected odds" for a single bet was 7.72, but, after two consecutive wins, the gamblers selected average odds of just 3.60. As a result, the winnings of gamblers who rode long streaks weren't significantly higher than the winnings of the average gambler.
The researchers also observed that the inverse occurred; gamblers who lost acted as if they were due for a win, made riskier bets, and thus were more likely to continue losing:
This is a neat result. Everyone knows that the Gambler's Fallacy is, well, a fallacy, but its wrongness is exacerbated by the fact that gamblers can't help but believe it's true. If you're on a winning streak, you're not "due" for anything, but thanks to a fluke in our psychology, you are more likely to keep winning.
Correction: An earlier version of these charts referred to winning and losing "steaks." The charts have been updated to better reflect the focus of this research.
h/t Douglas M.