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Resumen
We investigate the «law of small numbers» using a data set on lotto gambling that allows us to measure players’ reactions to draws. While most players pick the same set of numbers week after week, we find that those who do change, react on average as predicted by the law of small numbers as formalized in recent behavioral theory. In particular, players tend to bet less on numbers that were drawn in the last week, as suggested by the «gambler’s fallacy», and bet more on a number if it was frequently drawn in the recent past, consistent with the «hot hand fallacy».
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