Biased Beliefs About Random Samples: Evidence from Two Integrated Experiments

@article{Benjamin2017BiasedBA,
  title={Biased Beliefs About Random Samples: Evidence from Two Integrated Experiments},
  author={Daniel J. Benjamin and Don A. Moore and Matthew Rabin},
  journal={NBER Working Paper Series},
  year={2017}
}
This paper describes results of a pair of incentivized experiments on biases in judgments about random samples. Consistent with the Law of Small Numbers (LSN), participants exaggerated the likelihood that short sequences and random subsets of coin flips would be balanced between heads and tails. Consistent with the Non-Belief in the Law of Large Numbers (NBLLN), participants underestimated the likelihood that large samples would be close to 50% heads. However, we identify some shortcomings of… 

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