53 fever!

One thing statisticians love is a story about people acting foolish around probability . . .

Paul Alper points us to this news article by David Robson:

Fifteen years ago, the people of Italy experienced a strange kind of mass hysteria known as “53 fever”.

The madness centred on the country’s lottery. Players can choose between 11 different wheels, based in cities such as Bari, Naples or Venice. Once you have picked which wheels to play, you can then bet on a selection of numbers between 1 and 90. Your winnings depend on how much you initially bet, how many numbers you picked and how many you got right.

Sometime in 2003, however, the number 53 simply stopped coming up on the Venice wheel – leading punters to place increasingly big bets on the number in the certainty that it must soon make a reappearance.

By early 2005, 53 fever had apparently led thousands to their financial ruin, the pain of which resulted in a spate of suicides. The hysteria only died away when it finally came up in the 9 February draw, after 182 no-shows and four billion euros worth of bets.

While it may have appeared like a kind of madness, the victims had been led astray by a reasoning flaw called the “gambler’s fallacy” – a worryingly common error that can derail many of our professional decisions, from a goalkeeper’s responses to penalty shootouts in football to stock market investments and even judicial rulings on new asylum cases. . . .

Surprisingly, education and intelligence do not protect us against the bias. Indeed, one study by Chinese and American researchers found that people with higher IQs are actually more susceptible to the gambler’s fallacy than people who score less well on standardised tests. It could be that the more intelligent people overthink the patterns and believe that they are smart enough to predict what comes next. . . .

One team of researchers recently analysed US judges’ decisions on whether or not to grant asylum to refugees. Logically speaking, the ordering of the cases should not matter. But in line with the gambler’s fallacy, the team found that the judges were up to 5.5% less likely to grant a case if they had granted the two previous cases – a serious decline from the average acceptance rate of 29%. Consciously or not, they seemed to think that the chances of having the same judgement three times in a row was just too small, and so they were more inclined to break the streak.

The researchers next analysed bank staff considering loan applications. Once again, the order of the applications made a difference: the loan officers were up to 8% more likely to reject an application after they had already accepted two or more in a row – and vice versa.

As a final test, the team analysed umpires’ decisions in Major League Baseball games. In this case, the umpires were about 1.5% less likely to call a pitch a strike if the previous pitch was also called a strike – a small but significant bias that could make all the difference in a game. Kelly Shue, one the co-authors of the study, says that she was initially surprised at the results. “Because these are professionals and they’re making decisions as part of their primary occupation,” she says. But they were still vulnerable to the bias. . . .