Reading Notes & Thoughts from…

Gambler’s Fallacy. Thinking future probabilities are affected by past events. In sports, the hot hand.  The gambler’s fallacy, also known as the Monte Carlo fallacy or the fallacy of the maturity of chances, is the incorrect belief that, if a particular event occurs more frequently than normal during the past, it is less likely to happen in the future (or vice versa), when it has otherwise been established that the probability of such events does not depend on what has happened in the past.

Such events, having the quality of historical independence, are referred to as statistically independent. The fallacy is commonly associated with gambling, where it may be believed, for example, that the next dice roll is more than usually likely to be six because there have recently been fewer than the usual number of sixes.
Zero-Risk Bias. We prefer to reduce small risks to zero rather than reduce risks by a larger amount that doesn’t get them to zero.  This form of unconscious bias which shows that people prefer to completely eliminate a specific risk in a sub-part of a problem, rather than alternative options where some risks are reduced (but not eliminated) but which have a much larger overall impact.

It stems from our basic desire to reduce risk and increase stability and safety. As a result, people overweigh and favour complete certainty and opt for “zero risk solutions”, even when other solutions would be more beneficial.

What would you prefer:

Partially cleaning up two nuclear waste sites, saving 50 lives in the first and 40 in the second every year

With the same amount of effort, completely cleaning up one of the two sites, saving 70 lives a year

While you might not be aware of it, you are likely to choose option 2, because it reduces a certain problem down to zero.