Rouge et noir: Influence of previous play on choice of binary event outcome and size of stake in a gambling situation

Abstract

An investigation is described which attempts to determine, in a gambling situation, the effect of a player's previous play on (i) his choice of the next event outcome in a binary sequence; and (ii) the size of his stake placed on the next event outcome. In three separate experiments three age groups are studied viz. adults, 14-year-old boys, and 10-year-old boys and girls. All are given an initial ‘capital’ to play with and have to predict the colour at the next turn of a roulette wheel. The results indicate that the negative recency effect is more common after losing (incorrect guessing) than after winning, except in the youngest group the members of which seem more influenced by their own previous predictions than by the actual event outcome. Whether the stake is increased, decreased or remains the same, after winning and losing respectively, depends on what the players are evidently seeking to maximise. It appears that the oldest and youngest groups are attempting to maximise the utility of play, while the 14-year-old subjects are intent on minimising their losses. The different strategies of play employed by the subjects support the distinction which may be made between the idea of ‘negative recency’ and the so-called ‘gambler's fallacy’. The latter as defined in the paper, cannot be predicted from the former.