Misconception of chance occurs when people believe that a short random sequence reflects the properties of the underlying process.

• A. Gambler's fallacy
• B. Availability bias
• C. Misconception of chance
• D. Representativeness bias

Answer: (C)

When we look at randomness, the tendency to expect a short sequence to mirror the long-run probabilities is called a misconception of chance. People often assume that just a few outcomes should look representative of the underlying process—so after several heads in a row on a fair coin, they might think the coin is biased or that a tail is now “due.” In reality, the law of small numbers tells us that small samples can be highly variable and need more outcomes to reveal the true probability.

This isn’t just about guessing after a streak in the moment; it’s about misreading any short sequence as evidence of the process’s properties. That makes it distinct from availability bias (how easily examples come to mind) or a specific form of the gambler’s fallacy (expecting a reversal after a streak). The core idea here is the misinterpretation of chance from a limited sample.