The Roll of the Dice

The topic of probability is introduced through analysis of games of chance, using the casino games of roulette and the dice game craps. The nature of probability is explored, including different interpretations of what probability actually is. Ways of combining probabilities are described. The player will lose in the long run, but how long a run is needed for this to show itself? The asymmetry between the player and the gambling house is explored. The Gambler’s Fallacy is contrasted to the law of large numbers.

Behavioral factors affecting investment decision-making in bank stocks on the Ghana stock exchange

Purpose The finance literature is awash with papers bordering on the classical assumption that investors are rational in their decision-making, and hence, would always take decisions rationally given the right information, thus making the stock market efficient. This assumption has, however, been found to be at least inadequate given the fact that investors are complex psychological beings full of emotions. This paper aims to investigate the psychological factors that tend to influence the decisions of investors. Design/methodology/approach The study used a questionnaire to survey a total of 350 investors holding stocks of listed banks on the Ghana Stock Exchange (GSE). Findings The study found the existence of various behavioural biases among the investors surveyed. The most dominant factor or bias found to be influencing investment decisions of respondents was herding with nearly 62% weight. Again, biases such as regret aversion and gambler’s fallacy were also found to strongly influence the decisions of investors, along with mental accounting, overconfidence and anchoring. Practical implications The presence of these behavioural biases, therefore suggests that investors do not always take rational decisions, and hence, making the stock market efficient and that as psychological beings, their investment decisions are impacted strongly by their psychology. Originality/value The study used a questionnaire to survey a total of 350 investors holding stocks of listed banks on the GSE with a special focus on overconfidence, anchoring, herding, gambler’s fallacy, mental accounting and regret aversion as the variables of interest, the first of its kind in Ghana.

Penerapan Decision tree dalam pengambilan keputusan untuk pemain Texas Holdem Poker

Texas holdem poker is a popular poker game. This game is played by millions of people every day, both to find additional income or just for fun. But in fact not everyone who plays poker with these goals gets according to what they have planned. Some people actually experience losses after playing. They unconsciously develop the logic of gambler's fallacy that causes them to play poker without using strategy. This research made a system that can prove the defect of gambler's fallacy and made a tool for playing poker. The processed dataset is a dataset containing information of cards used in poker and their probability of occurrence. The method used in this research are iterative deepening search tree and decision tree. The main results of this research is a tool that can provide insight as a basis for decision making. However, this tool has not been able to prove its capabilities in helping to increase the winning percentage, so that further study is needed. In addition, this study also shows that playing with gambler's fallacy logic only gives 48.13% wins of 6,000 trials. These results proved that using gambler's fallacy logic in playing poker is a mistake.Keywords – Tree, Poker, Probability, Gambler’s Fallacy Abstrak Texas holdem poker merupakan permainan poker yang populer. Permainan ini dimainkan oleh jutaan orang setiap harinya, baik untuk mencari penghasilan tambahan ataupun hanya untuk bersenang-senang. Namun pada kenyataanya tidak semua orang yang bermain poker dengan tujuan tersebut mendapatkan sesuai dengan apa yang mereka rencanakan. Sebagian orang justru mengalami kerugian pasca bermain. Mereka tanpa sadar mengembangkan logika berpikir gambler’s fallacy yang mengakibatkan bermain tanpa strategi. Makalah ini menyajikan hasil studi penerapan pohon keputusan dan pohon pencarian untuk membuktikan kecacatan gambler’s fallacy dan membantu dalam bermain poker. Dataset yang diolah adalah dataset yang berisi informasi kartu-kartu yang dipakai dalam permainan serta probabilitas kemunculannya. Metode yang digunakan pada penelitian ini adalah metode pencarian pada struktur tree dan metode pohon keputusan. Hasil utama dari penelitian ini adalah alat bantu yang mampu memberikan insight sebagai dasar pengambilan keputusan. Namun, alat bantu ini belum bisa dibuktikan kapabilitasnya dalam membantu menaikkan persentase kemenangan sehingga diperlukan studi lanjutan. Selain itu, penelitian ini juga menunjukkan bahwa bermain dengan logika gambler’s fallacy hanya memberikan 48.13% kemenangan dari 6000 percobaan. Hasil tersebut membuktikan bahwa menggunakan logika gambler’s fallacy dalam bermain poker merupakan suatu kesalahan.Kata kunci – Tree, Poker, Probabilitas, Gambler’s Fallacy

Role of Behavioral Biases in Real Estate Prices in Pakistan

The study aims to explore the effect of behavioral biases on financial decision making in the real estate sector of Pakistan. The data of a sample of 244 real estate investors are collected through a survey carried out using different sources. The findings of the study show the relationship of different biases, including overconfidence, herding effect, gambler’s fallacy, and regret aversion on prices of real estate. Real estate prices are more affected by overconfidence and gambler’s fallacy than herding effect and regrets aversion bias in Pakistan. The findings furthermore reveal that these biases do not depend on gender, education, and demographics. It is recommended to carefully consider the market factors while making decisions in real estate, as the prices do not always show the real value of the property.