Recent experimental evidence suggests that noisy behavior correlates strongly with cognitive ability. This puts previous studies that found a negative relation between cognitive ability and risk aversion into perspective and in particular raises the question of how to achieve robust inference in...

The “gambler's fallacy” is the false belief that a random event is less likely to occur if the event has occurred recently. Such beliefs are false if the onset of events is in fact independent of previous events. We study gender differences in the gambler's fallacy using data from the Danish...

We investigate the “law of small numbers” using a unique panel data set on lotto gambling. Because we can track individual players over time, we can measure how they react to outcomes of recent lotto drawings. We can therefore test whether they behave as if they believe they can predict...