Abstract: Probability matching is a classic choice anomaly that has been studied extensively. While many approaches assume that it is a cognitive shortcut driven by cognitive limitations, recent literature suggests that it is not a strategy per se, but rather another outcome of people’s well-documented misperception of randomness. People search for patterns even in random sequences, which results in probability matching at the outcome level. Previous studies have supported this by the finding that distracting people with a secondary verbal working memory task presumably prevents the pattern search, resulting in more maximizing behavior that is considered more rational. The current paper demonstrates with two experiments that there is actually truth in both accounts. For some participants, probability matching indeed seems to be the result of a cognitive shortcut, a simple “win-stay, lose-shift” strategy, and in one experiment identified these as participants low in working memory capacity. For others, however, a potentially smart pattern search strategy underlies probability matching. These probability matchers (who still look irrational in the absence of patterns) actually have a higher chance of finding a pattern if one exists. Contrary to the almost uniformly negative perception of probability matching, we therefore conclude that there can be a potentially smart strategy behind probability matching.

Keywords: Probability matching, Working memory capacity, Pattern search

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