The "gambler's fallacy" and the "hot hand" are considered as typical examples of misunderstanding random chronological events. People have two different expectations on the same historical information: gambler's fallacy and hot hand. This paper analyzes the occurring numbers of the four effects which are "gambler's fallacy", "hot hand", "hot outcome" and "stock of luck" and their revenues in a series of random chronological events by describing the decision-making preferences of heterogeneous individuals with the method of computer simulation. We can conclude from the simulation process of coin flips that there are no differences among the occurring numbers and the revenues of these four effects mentioned above. However, they are different when a single period is focused on, which conforms to the beliefs and behavior in the real decision-making situation.
展开▼
