We all have biases or glitches in our thinking. One of these is the ‘Gamblers Fallacy’ where we attach too much significance to previous events, believing that they'll somehow influence future outcomes. The classic example is coin-tossing. After getting heads, say, five consecutive times, our inclination is to predict an increase in likelihood that the next coin toss will be tails. We think the odds must certainly be in the favour of heads. In reality, the odds are still 50/50, each flip of the coin is an independent event.
This feeds into how we behave in a number of ways. If you are selling something and it’s not working out, always getting knocked back, you might feel that your luck has to eventually change and that you are due a break. The ‘it has to change’ type of feeling. Then there is the ‘Hot Hand’ idea where a person who has experienced success has a greater chance of more success in future attempts.
The next time you are trying to predict change, think a little deeper if you find yourself basing your predictions on past events. Think a bit more about the factors that influence change and only include what’s relevant (it doesn’t matter that the last five flips were heads)
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