Independence of Events, and Errors in Understanding it

5 Pages Posted: 3 Aug 2016

See all articles by Chris Roney

Chris Roney

University of Western Ontario - King's University College

Date Written: August 2016

Abstract

This article outlines errors that may occur when people predict event outcomes. The focus is on how our tendency to perceive independent events as connected, consistent with tenets of Gestalt Psychology, biases our expectations. Two well-documented phenomena that occur when people make predictions after a run of a particular outcome — the “gambler’s fallacy” and the “hot hand” — are used to illustrate the issue, and research is presented that highlights the importance of misperceptions of independence. Novel implications and hypotheses are presented that are generated from use of this gestalt approach.

Suggested Citation

Roney, Chris, Independence of Events, and Errors in Understanding it (August 2016). Palgrave Communications, Vol. 2, 2016, Available at SSRN: https://ssrn.com/abstract=2817838 or http://dx.doi.org/10.1057/palcomms.2016.50

Chris Roney (Contact Author)

University of Western Ontario - King's University College ( email )

266 Epworth Avenue
London, Ontario N6A 2M3
Canada

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