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Verifying the representativeness heuristic: A field experiment with real-life lottery tickets

Author

Listed:
  • Michał Wiktor Krawczyk

    (Faculty of Economic Sciences, University of Warsaw)

  • Joanna Rachubik

    (Faculty of Economic Sciences, University of Warsaw)

Abstract

Despite having the same probability of being drawn, certain number combinations are more popular than others among the lottery players. One explanation of such a preference is the representativeness heuristic (RH). Unlike previous hypothetical experiments, in the present experiment we used real-life lottery tickets, involving a high payout in case of winning to elicit true preferences. To verify if people prefer randomly-looking number combinations, participants were to choose a preferred ticket. To validate if it is likely to be caused by RH, we correlated preference for “random” sequences with the belief in dependence between subsequent coin tosses. We confirm that people strongly prefer random sequences and that a non-trivial fraction believes in dependence between coin tosses. However, there is no correlation between these two tendencies, questioning the RH explanation. By contrast, participants who have an (irrationally) strong preference for number combinations also tend to make (irrationally) specific predictions in the coin task. Unexpectedly, we find that females are considerably more likely to belong to this group than males.

Suggested Citation

  • Michał Wiktor Krawczyk & Joanna Rachubik, 2018. "Verifying the representativeness heuristic: A field experiment with real-life lottery tickets," Working Papers 2018-03, Faculty of Economic Sciences, University of Warsaw.
    • Handle: RePEc:war:wpaper:2018-03
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    File URL: https://www.wne.uw.edu.pl/index.php/download_file/4018/
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    References listed on IDEAS

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    Cited by:

    1. Raman Kachurka & Michał Wiktor Krawczyk, 2020. "Lottery "strategies": monetizing players' behavioral biases," Working Papers 2020-29, Faculty of Economic Sciences, University of Warsaw.

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    More about this item

    Keywords

    decision bias; gambler’s fallacy; gender difference; hot hand fallacy; lottery choice; misperception of randomness; number preference in lotteries; representativeness heuristic;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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