Tag Archives: Casino

The Habits of Societies: The Power of Habit, Part 3b

In Part 1a, we had an introduction Duhigg’s book on habits. In Part 1b, we looked at some of the highlights and the key points from the first section (on individuals) of the book. In Part 2, we looked some of the stories that Duhigg shared in the second section about Michael PhelpsAlcoaStarbucks, and the Rhode Island Hospital.  In yesterday’s post, we began our examination of the last section on societies by looking at Martin Luther King, Jr. and Rick Warren. In today’s post, we’ll look at the last chapter of the last section.

The last chapter juxtaposes the stories of Angie Bachmann and Brian Thomas. Bachmann’s story leads us on a journey of the development of a compulsive gambler and all the happenings that follow. Thomas’ story is the accidental murder of his wife. It seems strange that an adjective like accidental would precede a word like murder, but in this case, it seems to fit.

Duhigg uses these two stories to espouse the view that under different circumstances, we should be responsible for the consequences of our habits. To be honest, I didn’t see the oft-used conservative viewpoint that folks need to take ‘personal responsibility‘ coming. Nonetheless, Duhigg makes a pretty good case for it. In the case of Thomas’, there wasn’t much that he could have done to prevent the accidental murder. He “wasn’t himself” when it happened. Of course, Bachmann “wasn’t herself” when she was gambling, but the argument then becomes that Bachmann knew that she had a problem and knew that there were things she could do to prevent herself from destroying her life.

At first, I struggled with this viewpoint. I strongly believe that the environment plays a big part in the way we behave as people in society. Of course, Duhigg does acknowledge this. I’m just saying that I think, even today, we might be underestimating the importance that the environment plays on our ability to make decisions for ourselves.

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After sitting back and reflecting on the last section of this chapter, I’m more ambiguous about what I think. When I read it, I remember thinking that Duhigg made a really convincing case that we need to take personal responsibility for our habits. But in reflecting on some of the other contrary evidence, I don’t know that everyone has the strength/willpower to simply change their habit when their environment continues to support their old habits. For instance, I’m thinking about someone who’s gotten mixed up in recreational drugs. If someone’s trying to change their life such that they no longer use recreational drugs, it’s going to be important that their environment change along with them. Meaning, if they stop using drugs, but they’re still hanging out will all of the same friends (who use drugs) and go to places where drugs are used, it’s going to be very difficult to maintain one’s goal of staying clean. There’s also the neuropsychological component where the chemicals in the drug cause certain reactions in the brain making it that much more difficult to give up.

Like I said, I’m ambiguous as to what exactly I think on this topic, but if you’re interested, I highly recommend reading the last chapter of The Power of Habit: Why We Do What We Do in Life and Business. Duhigg makes an excellent case for personal responsibility.

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If you liked this paper/series, you might want to check out some of the other papers/series I’ve posted.

Don’t Fall for the Gambler’s Fallacy: List of Biases in Judgment and Decision-Making, Part 7

A little later in the day than I would have liked, but today’s cognitive bias is the gambler’s fallacy. The bias gets its name from, as you’d expect, gambling. The easiest example to think of is when you’re flipping a coin. If you flip a coin 4 times and each of those 4 times the coin turned up heads, you’d expect the coin to turn up tails on the next (or at least have a higher chance of turning over tails), right? WRONG!

The odds are exactly the same on the 5th turn as the 6th turn as the 66th turn as the 11,024th turn. Why? Because the two instances of flipping the coin are independent events. (Note: we’re ignoring, for the time being, any effects that quantum reality might have on a given event in the past and the future.) So, every time you flip a coin, that’s an independent event — unaffected by earlier events.

Another important example is the reverse fallacy. That is, if we think that heads are “hot” because it’s been flipped a number of time, thinking that there’s a better chance that heads will be flipped is also a fallacy. Again, this is an independent event — unaffected by previous events.

This fallacy is so named because there’s a famous example of the gambler’s fallacy happening at the Monte Carlo Casino where, on roulette, black came up 26 times in a row. A number of gamblers reasoned that red would come up because there had been such an unlikely number of blacks that came up in a row. As the story goes, they lost millions.

Other examples of the gambler’s fallacy:

  • Childbirth: “we’ve had 3 boys, so we’re going to have a girl now…”
  • Lottery: “I’ve lost 3,000 times, so I’m due for a win…”
  • Sports: “Player X is playing really well, they’re bound to start playing bad…”
  • Stock market: “Stock X has had 7 straight down days, so it’s bound to go up on this next trading day…”

Ways for Avoiding the Gambler’s Fallacy

1) Independent Events vs. Dependent Events

The biggest way to avoid the gambler’s fallacy is to understand the difference between an independent event and a dependent event. In the classic example, the odds of a coin landing on heads or tails is — negligibly — 50/50 (I say negligibly because there are those who contend that the “heads side” weighs more and thus gives it a slight advantage). An example of a dependent event would be picking cards from a deck. There are 52 cards in a deck and if you pick one card without replacing it, your odds of picking one of the other 51 cards increases (ever so slightly).

If you liked this post, you might like one of the other posts in this series: