Gambler's fallacy

From Wikipedia, the free encyclopedia

The gambler's fallacy, also known as the Monte Carlo fallacy or the fallacy of the maturity of chances, is the incorrect belief that, if an event (whose occurrences are independent and identically distributed) has occurred more frequently than expected, it is less likely to happen again in the future (or vice versa). The fallacy is commonly associated with gambling, where it may be believed, for example, that the next dice roll is more than usually likely to be six because there have recently been fewer than the expected number of sixes.

The term "Monte Carlo fallacy" originates from the best known example of the phenomenon, which occurred in the Monte Carlo Casino in 1913.

Examples

Coin toss

Over time, the proportion of red/blue coin tosses approaches 50-50, but the difference decreases to zero non-systematically.

The gambler's fallacy can be illustrated by considering the repeated toss of a fair coin. The outcomes in different tosses are statistically independent and the probability of getting heads on a single toss is 1/2 (one in two). The probability of getting two heads in two tosses is 1/4 (one in four) and the probability of getting three heads in three tosses is 1/8 (one in eight). In general, if A_i is the event where toss i of a fair coin comes up heads, then:

${\displaystyle Pr\left(\bigcap _{i=1}^n{A}_i\right)=\prod _{i=1}^{n}Pr(A_i)=\frac{1}{2^n}}$.

If after tossing four heads in a row, the next coin toss also came up heads, it would complete a run of five successive heads. Since the probability of a run of five successive heads is 1/32 (one in thirty-two), a person might believe that the next flip would be more likely to come up tails rather than heads again. This is incorrect and is an example of the gambler's fallacy. The event "5 heads in a row" and the event "first 4 heads, then a tails" are equally likely, each having probability 1/32. Since the first four tosses turn up heads, the probability that the next toss is a head is:

${\displaystyle Pr\left(A_5|A_1\cap A_2\cap A_3\cap A_4\right)=Pr\left(A_5\right)=\frac{1}{2}}$.

While a run of five heads has a probability of 1/32 = 0.03125 (a little over 3%), the misunderstanding lies in not realizing that this is the case only before the first coin is tossed. After the first four tosses in this example, the results are no longer unknown, so their probabilities are at that point equal to 1 (100%). The probability of a run of coin tosses of any length continuing for one more toss is always 0.5. The reasoning that a fifth toss is more likely to be tails because the previous four tosses were heads, with a run of luck in the past influencing the odds in the future, forms the basis of the fallacy.

Why the probability is 1/2 for a fair coin

If a fair coin is flipped 21 times, the probability of 21 heads is 1 in 2,097,152. The probability of flipping a head after having already flipped 20 heads in a row is 1/2. Assuming a fair coin:

• The probability of 20 heads, then 1 tail is 0.5²⁰ × 0.5 = 0.5²¹
• The probability of 20 heads, then 1 head is 0.5²⁰ × 0.5 = 0.5²¹

The probability of getting 20 heads then 1 tail, and the probability of getting 20 heads then another head are both 1 in 2,097,152. When flipping a fair coin 21 times, the outcome is equally likely to be 21 heads as 20 heads and then 1 tail. These two outcomes are equally as likely as any of the other combinations that can be obtained from 21 flips of a coin. All of the 21-flip combinations will have probabilities equal to 0.5²¹, or 1 in 2,097,152. Assuming that a change in the probability will occur as a result of the outcome of prior flips is incorrect because every outcome of a 21-flip sequence is as likely as the other outcomes. In accordance with Bayes' theorem, the likely outcome of each flip is the probability of the fair coin, which is 1/2.

Other examples

The fallacy leads to the incorrect notion that previous failures will create an increased probability of success on subsequent attempts. For a fair 16-sided die, the probability of each outcome occurring is 1/16 (6.25%). If a win is defined as rolling a 1, the probability of a 1 occurring at least once in 16 rolls is:

${\displaystyle 1-{\left[\frac{15}{16}\right]}^{16}=64.39\mathrm{\%}}$

The probability of a loss on the first roll is 15/16 (93.75%). According to the fallacy, the player should have a higher chance of winning after one loss has occurred. The probability of at least one win is now:

${\displaystyle 1-{\left[\frac{15}{16}\right]}^{15}=62.02\mathrm{\%}}$

By losing one toss, the player's probability of winning drops by two percentage points. With 5 losses and 11 rolls remaining, the probability of winning drops to around 0.5 (50%). The probability of at least one win does not increase after a series of losses; indeed, the probability of success actually decreases, because there are fewer trials left in which to win. The probability of winning will eventually be equal to the probability of winning a single toss, which is 1/16 (6.25%) and occurs when only one toss is left.

Reverse position

After a consistent tendency towards tails, a gambler may also decide that tails has become a more likely outcome. This is a rational and Bayesian conclusion, bearing in mind the possibility that the coin may not be fair; it is not a fallacy. Believing the odds to favor tails, the gambler sees no reason to change to heads. However it is a fallacy that a sequence of trials carries a memory of past results which tend to favor or disfavor future outcomes.

The inverse gambler's fallacy described by Ian Hacking is a situation where a gambler entering a room and seeing a person rolling a double six on a pair of dice may erroneously conclude that the person must have been rolling the dice for quite a while, as they would be unlikely to get a double six on their first attempt.

Retrospective gambler's fallacy

Researchers have examined whether a similar bias exists for inferences about unknown past events based upon known subsequent events, calling this the "retrospective gambler's fallacy".

An example of a retrospective gambler's fallacy would be to observe multiple successive "heads" on a coin toss and conclude from this that the previously unknown flip was "tails". Real world examples of retrospective gambler's fallacy have been argued to exist in events such as the origin of the Universe. In his book Universes, John Leslie argues that "the presence of vastly many universes very different in their characters might be our best explanation for why at least one universe has a life-permitting character". Daniel M. Oppenheimer and Benoît Monin argue that "In other words, the 'best explanation' for a low-probability event is that it is only one in a multiple of trials, which is the core intuition of the reverse gambler's fallacy." Philosophical arguments are ongoing about whether such arguments are or are not a fallacy, arguing that the occurrence of our universe says nothing about the existence of other universes or trials of universes. Three studies involving Stanford University students tested the existence of a retrospective gamblers' fallacy. All three studies concluded that people have a gamblers' fallacy retrospectively as well as to future events. The authors of all three studies concluded their findings have significant "methodological implications" but may also have "important theoretical implications" that need investigation and research, saying "[a] thorough understanding of such reasoning processes requires that we not only examine how they influence our predictions of the future, but also our perceptions of the past."

Childbirth

In 1796, Pierre-Simon Laplace described in A Philosophical Essay on Probabilities the ways in which men calculated their probability of having sons: "I have seen men, ardently desirous of having a son, who could learn only with anxiety of the births of boys in the month when they expected to become fathers. Imagining that the ratio of these births to those of girls ought to be the same at the end of each month, they judged that the boys already born would render more probable the births next of girls." The expectant fathers feared that if more sons were born in the surrounding community, then they themselves would be more likely to have a daughter. This essay by Laplace is regarded as one of the earliest descriptions of the fallacy. Likewise, after having multiple children of the same sex, some parents may erroneously believe that they are due to have a child of the opposite sex.

Monte Carlo Casino

Perhaps the most famous example of the gambler's fallacy occurred in a game of roulette at the Monte Carlo Casino on August 18, 1913, when the ball fell in black 26 times in a row. This was an extremely uncommon occurrence: the probability of a sequence of either red or black occurring 26 times in a row is (18/37)^26-1 or around 1 in 66.6 million, assuming the mechanism is unbiased. Gamblers lost millions of francs betting against black, reasoning incorrectly that the streak was causing an imbalance in the randomness of the wheel, and that it had to be followed by a long streak of red.

Non-examples

Non-independent events

The gambler's fallacy does not apply when the probability of different events is not independent. In such cases, the probability of future events can change based on the outcome of past events, such as the statistical permutation of events. An example is when cards are drawn from a deck without replacement. If an ace is drawn from a deck and not reinserted, the next card drawn is less likely to be an ace and more likely to be of another rank. The probability of drawing another ace, assuming that it was the first card drawn and that there are no jokers, has decreased from 4/52 (7.69%) to 3/51 (5.88%), while the probability for each other rank has increased from 4/52 (7.69%) to 4/51 (7.84%). This effect allows card counting systems to work in games such as blackjack.

Bias

In most illustrations of the gambler's fallacy and the reverse gambler's fallacy, the trial (e.g. flipping a coin) is assumed to be fair. In practice, this assumption may not hold. For example, if a coin is flipped 21 times, the probability of 21 heads with a fair coin is 1 in 2,097,152. Since this probability is so small, if it happens, it may well be that the coin is somehow biased towards landing on heads, or that it is being controlled by hidden magnets, or similar. In this case, the smart bet is "heads" because Bayesian inference from the empirical evidence — 21 heads in a row — suggests that the coin is likely to be biased toward heads. Bayesian inference can be used to show that when the long-run proportion of different outcomes is unknown but exchangeable (meaning that the random process from which the outcomes are generated may be biased but is equally likely to be biased in any direction) and that previous observations demonstrate the likely direction of the bias, the outcome which has occurred the most in the observed data is the most likely to occur again.

For example, if the a priori probability of a biased coin is say 1%, and assuming that such a biased coin would come down heads say 60% of the time, then after 21 heads the probability of a biased coin has increased to about 32%.

The opening scene of the play Rosencrantz and Guildenstern Are Dead by Tom Stoppard discusses these issues as one man continually flips heads and the other considers various possible explanations.

Changing probabilities

If external factors are allowed to change the probability of the events, the gambler's fallacy may not hold. For example, a change in the game rules might favour one player over the other, improving his or her win percentage. Similarly, an inexperienced player's success may decrease after opposing teams learn about and play against their weaknesses. This is another example of bias.

Psychology

Origins

The gambler's fallacy arises out of a belief in a law of small numbers, leading to the erroneous belief that small samples must be representative of the larger population. According to the fallacy, streaks must eventually even out in order to be representative. Amos Tversky and Daniel Kahneman first proposed that the gambler's fallacy is a cognitive bias produced by a psychological heuristic called the representativeness heuristic, which states that people evaluate the probability of a certain event by assessing how similar it is to events they have experienced before, and how similar the events surrounding those two processes are. According to this view, "after observing a long run of red on the roulette wheel, for example, most people erroneously believe that black will result in a more representative sequence than the occurrence of an additional red", so people expect that a short run of random outcomes should share properties of a longer run, specifically in that deviations from average should balance out. When people are asked to make up a random-looking sequence of coin tosses, they tend to make sequences where the proportion of heads to tails stays closer to 0.5 in any short segment than would be predicted by chance, a phenomenon known as insensitivity to sample size. Kahneman and Tversky interpret this to mean that people believe short sequences of random events should be representative of longer ones. The representativeness heuristic is also cited behind the related phenomenon of the clustering illusion, according to which people see streaks of random events as being non-random when such streaks are actually much more likely to occur in small samples than people expect.

The gambler's fallacy can also be attributed to the mistaken belief that gambling, or even chance itself, is a fair process that can correct itself in the event of streaks, known as the just-world hypothesis. Other researchers believe that belief in the fallacy may be the result of a mistaken belief in an internal locus of control. When a person believes that gambling outcomes are the result of their own skill, they may be more susceptible to the gambler's fallacy because they reject the idea that chance could overcome skill or talent.

Variations

Some researchers believe that it is possible to define two types of gambler's fallacy: type one and type two. Type one is the classic gambler's fallacy, where individuals believe that a particular outcome is due after a long streak of another outcome. Type two gambler's fallacy, as defined by Gideon Keren and Charles Lewis, occurs when a gambler underestimates how many observations are needed to detect a favorable outcome, such as watching a roulette wheel for a length of time and then betting on the numbers that appear most often. For events with a high degree of randomness, detecting a bias that will lead to a favorable outcome takes an impractically large amount of time and is very difficult, if not impossible, to do. The two types differ in that type one wrongly assumes that gambling conditions are fair and perfect, while type two assumes that the conditions are biased, and that this bias can be detected after a certain amount of time.

Another variety, known as the retrospective gambler's fallacy, occurs when individuals judge that a seemingly rare event must come from a longer sequence than a more common event does. The belief that an imaginary sequence of die rolls is more than three times as long when a set of three sixes is observed as opposed to when there are only two sixes. This effect can be observed in isolated instances, or even sequentially. Another example would involve hearing that a teenager has unprotected sex and becomes pregnant on a given night, and concluding that she has been engaging in unprotected sex for longer than if we hear she had unprotected sex but did not become pregnant, when the probability of becoming pregnant as a result of each intercourse is independent of the amount of prior intercourse.

Relationship to hot-hand fallacy

Another psychological perspective states that gambler's fallacy can be seen as the counterpart to basketball's hot-hand fallacy, in which people tend to predict the same outcome as the previous event - known as positive recency - resulting in a belief that a high scorer will continue to score. In the gambler's fallacy, people predict the opposite outcome of the previous event - negative recency - believing that since the roulette wheel has landed on black on the previous six occasions, it is due to land on red the next. Ayton and Fischer have theorized that people display positive recency for the hot-hand fallacy because the fallacy deals with human performance, and that people do not believe that an inanimate object can become "hot." Human performance is not perceived as random, and people are more likely to continue streaks when they believe that the process generating the results is nonrandom. When a person exhibits the gambler's fallacy, they are more likely to exhibit the hot-hand fallacy as well, suggesting that one construct is responsible for the two fallacies.

The difference between the two fallacies is also found in economic decision-making. A study by Huber, Kirchler, and Stockl in 2010 examined how the hot hand and the gambler's fallacy are exhibited in the financial market. The researchers gave their participants a choice: they could either bet on the outcome of a series of coin tosses, use an expert opinion to sway their decision, or choose a risk-free alternative instead for a smaller financial reward. Participants turned to the expert opinion to make their decision 24% of the time based on their past experience of success, which exemplifies the hot-hand. If the expert was correct, 78% of the participants chose the expert's opinion again, as opposed to 57% doing so when the expert was wrong. The participants also exhibited the gambler's fallacy, with their selection of either heads or tails decreasing after noticing a streak of either outcome. This experiment helped bolster Ayton and Fischer's theory that people put more faith in human performance than they do in seemingly random processes.

Neurophysiology

While the representativeness heuristic and other cognitive biases are the most commonly cited cause of the gambler's fallacy, research suggests that there may also be a neurological component. Functional magnetic resonance imaging has shown that after losing a bet or gamble, known as riskloss, the frontoparietal network of the brain is activated, resulting in more risk-taking behavior. In contrast, there is decreased activity in the amygdala, caudate, and ventral striatum after a riskloss. Activation in the amygdala is negatively correlated with gambler's fallacy, so that the more activity exhibited in the amygdala, the less likely an individual is to fall prey to the gambler's fallacy. These results suggest that gambler's fallacy relies more on the prefrontal cortex, which is responsible for executive, goal-directed processes, and less on the brain areas that control affective decision-making.

The desire to continue gambling or betting is controlled by the striatum, which supports a choice-outcome contingency learning method. The striatum processes the errors in prediction and the behavior changes accordingly. After a win, the positive behavior is reinforced and after a loss, the behavior is conditioned to be avoided. In individuals exhibiting the gambler's fallacy, this choice-outcome contingency method is impaired, and they continue to make risks after a series of losses.

Possible solutions

The gambler's fallacy is a deep-seated cognitive bias and can be very hard to overcome. Educating individuals about the nature of randomness has not always proven effective in reducing or eliminating any manifestation of the fallacy. Participants in a study by Beach and Swensson in 1967 were shown a shuffled deck of index cards with shapes on them, and were instructed to guess which shape would come next in a sequence. The experimental group of participants was informed about the nature and existence of the gambler's fallacy, and were explicitly instructed not to rely on run dependency to make their guesses. The control group was not given this information. The response styles of the two groups were similar, indicating that the experimental group still based their choices on the length of the run sequence. This led to the conclusion that instructing individuals about randomness is not sufficient in lessening the gambler's fallacy.

An individual's susceptibility to the gambler's fallacy may decrease with age. A study by Fischbein and Schnarch in 1997 administered a questionnaire to five groups: students in grades 5, 7, 9, 11, and college students specializing in teaching mathematics. None of the participants had received any prior education regarding probability. The question asked was: "Ronni flipped a coin three times and in all cases heads came up. Ronni intends to flip the coin again. What is the chance of getting heads the fourth time?" The results indicated that as the students got older, the less likely they were to answer with "smaller than the chance of getting tails", which would indicate a negative recency effect. 35% of the 5th graders, 35% of the 7th graders, and 20% of the 9th graders exhibited the negative recency effect. Only 10% of the 11th graders answered this way, and none of the college students did. Fischbein and Schnarch theorized that an individual's tendency to rely on the representativeness heuristic and other cognitive biases can be overcome with age.

Another possible solution comes from Roney and Trick, Gestalt psychologists who suggest that the fallacy may be eliminated as a result of grouping. When a future event such as a coin toss is described as part of a sequence, no matter how arbitrarily, a person will automatically consider the event as it relates to the past events, resulting in the gambler's fallacy. When a person considers every event as independent, the fallacy can be greatly reduced.

Roney and Trick told participants in their experiment that they were betting on either two blocks of six coin tosses, or on two blocks of seven coin tosses. The fourth, fifth, and sixth tosses all had the same outcome, either three heads or three tails. The seventh toss was grouped with either the end of one block, or the beginning of the next block. Participants exhibited the strongest gambler's fallacy when the seventh trial was part of the first block, directly after the sequence of three heads or tails. The researchers pointed out that the participants that did not show the gambler's fallacy showed less confidence in their bets and bet fewer times than the participants who picked with the gambler's fallacy. When the seventh trial was grouped with the second block, and was perceived as not being part of a streak, the gambler's fallacy did not occur.

Roney and Trick argued that instead of teaching individuals about the nature of randomness, the fallacy could be avoided by training people to treat each event as if it is a beginning and not a continuation of previous events. They suggested that this would prevent people from gambling when they are losing, in the mistaken hope that their chances of winning are due to increase based on an interaction with previous events.

Users

Types of users

Within a real-world setting, numerous studies have uncovered that for various decision makers placed in high stakes scenarios, it is likely they will reflect some degree of strong negative autocorrelation in their judgement.

Asylum judges

In a study aimed at discovering if the negative autocorrelation that exists with the gambler's fallacy existed in the decision made by U.S. asylum judges, results showed that after two successive asylum grants, a judge would be 5.5% less likely to approve a third grant.

Baseball umpires

In the game of baseball, decisions are made every minute. One particular decision made by umpires which is often subject to scrutiny is the 'strike zone' decision. Whenever a batter does not swing, the umpire must decide if the ball was within a fair region for the batter, known as the strike zone. If outside of this zone, the ball does not count towards outing the batter. In a study of over 12,000 games, results showed that umpires are 1.3% less likely to call a strike if the previous two balls were also strikes.

Loan officers

In the decision making of loan officers, it can be argued that monetary incentives are a key factor in biased decision making, rendering it harder to examine the gambler's fallacy effect. However, research shows that loan officers who are not incentivised by monetary gain are 8% less likely to approve a loan if they approved one for the previous client.

Lottery players

The effect of gambler's fallacy on lottery selections, based on studies by Dek Terrell. After winning numbers are drawn, lottery players respond by reducing the number of times they select those numbers in following draws. This effect slowly corrects over time, as players become less affected by the fallacy.

Lottery play and jackpots entice gamblers around the globe, with the biggest decision for hopeful winners being what numbers to pick. While most people will have their own strategy, evidence shows that after a number is selected as a winner in the current draw, the same number will experience a significant drop in selections in the following lottery. A popular study by Charles Clotfelter and Philip Cook investigated this effect in 1991, where they concluded bettors would cease to select numbers immediately after they were selected, ultimately recovering selection popularity within three months. Soon after, a 1994 study was constructed by Dek Terrell to test the findings of Clotfelter and Cook. The key change in Terrell's study was the examination of a pari-mutuel lottery in which, a number selected with lower total wagers placed on it will result in a higher pay-out. While this examination did conclude that players in both types of lotteries exhibited behaviour in-line with the gambler's fallacy theory, those who took part in pari-mutuel betting seemed to be less influenced.

Table 1. Percentage change in numbers selected by lottery players based on Clotfelter, Cook (1991)

		Amount bet by lottery players
Numbers drawn 14 April 1988		Draw day	Days after draw
April	Winner Numbers	0	1	3	7	56
11	244	41	34	24	27	30
12	504	29	20	12	18	15
13	718	28	20	17	19	25
14	323	134	95	79	81	76
15	640	10	20	18	16	20
16	957	30	22	20	24	32
Average percentage of players selecting previously winning numbers compared to day of draw			78%	63%	68%	73%

The effect the of gambler's fallacy can be observed as numbers are chosen far less frequently soon after they are selected as winners, recovering slowly over a two-month period. For example, on the 11th of April 1988, 41 players selected 244 as the winning combination. Three days later only 24 individuals selected 244, a 41.5% decrease. This is the gambler's fallacy in motion, as lottery players believe that the occurrence of a winning combination in previous days will decrease its likelihood of occurring today.

Video game players

Several video games feature the use of loot boxes, a collection of in-game items awarded on opening with random contents set by rarity metrics, as a monetization scheme. Since around 2018, loot boxes have come under scrutiny from governments and advocates on the basis they are akin to gambling, particularly for games aimed at youth. Some games use a special "pity-timer" mechanism, that if the player has opened several loot boxes in a row without obtaining a high-rarity item, subsequent loot boxes will improve the odds of a higher-rate item drop. This is considered to feed into the gambler's fallacy since it reinforces the idea that a player will eventually obtain a high-rarity item (a win) after only receiving common items from a string of previous loot boxes.

Analogy

From Wikipedia, the free encyclopedia

https://en.wikipedia.org/wiki/Analogy

Analogy is a comparison or correspondence between two things (or two groups of things) because of a third element that they are considered to share.

In logic, it is an inference or an argument from one particular to another particular, as opposed to deduction, induction, and abduction. It is also used of where at least one of the premises, or the conclusion, is general rather than particular in nature. It has the general form A is to B as C is to D.

In a broader sense, analogical reasoning is a cognitive process of transferring some information or meaning of a particular subject (the analog, or source) onto another (the target); and also the linguistic expression corresponding to such a process. The term analogy can also refer to the relation between the source and the target themselves, which is often (though not always) a similarity, as in the biological notion of analogy.

Ernest Rutherford's model of the atom (modified by Niels Bohr) made an analogy between the atom and the Solar System.

Analogy plays a significant role in human thought processes. It has been argued that analogy lies at "the core of cognition".

Etymology

The English word analogy derives from the Latin analogia, itself derived from the Greek ἀναλογία, "proportion", from ana- "upon, according to" [also "again", "anew"] + logos "ratio" [also "word, speech, reckoning"].

Models and theories

Analogy plays a significant role in problem solving, as well as decision making, argumentation, perception, generalization, memory, creativity, invention, prediction, emotion, explanation, conceptualization and communication. It lies behind basic tasks such as the identification of places, objects and people, for example, in face perception and facial recognition systems. Hofstadter has argued that analogy is "the core of cognition".

An analogy is not a figure of speech but a kind of thought. Specific analogical language uses exemplification, comparisons, metaphors, similes, allegories, and parables, but not metonymy. Phrases like and so on, and the like, as if, and the very word like also rely on an analogical understanding by the receiver of a message including them. Analogy is important not only in ordinary language and common sense (where proverbs and idioms give many examples of its application) but also in science, philosophy, law and the humanities.

The concepts of association, comparison, correspondence, mathematical and morphological homology, homomorphism, iconicity, isomorphism, metaphor, resemblance, and similarity are closely related to analogy. In cognitive linguistics, the notion of conceptual metaphor may be equivalent to that of analogy. Analogy is also a basis for any comparative arguments as well as experiments whose results are transmitted to objects that have been not under examination (e.g., experiments on rats when results are applied to humans).

Analogy has been studied and discussed since classical antiquity by philosophers, scientists, theologists and lawyers. The last few decades have shown a renewed interest in analogy, most notably in cognitive science.

Development

• Aristotle identified analogy in works such as Metaphysics and Nicomachean Ethics
• Roman lawyers used analogical reasoning and the Greek word analogia.
• In Islamic logic, analogical reasoning was used for the process of qiyas in Islamic sharia law and fiqh jurisprudence.
• Medieval lawyers distinguished analogia legis and analogia iuris (see below).
• The Middle Ages saw an increased use and theorization of analogy.
• In Christian scholastic theology, analogical arguments were accepted in order to explain the attributes of God.
  • Aquinas made a distinction between equivocal, univocal and analogical terms, the last being those like healthy that have different but related meanings. Not only a person can be "healthy", but also the food that is good for health (see the contemporary distinction between polysemy and homonymy).
  • Thomas Cajetan wrote an influential treatise on analogy. In all of these cases, the wide Platonic and Aristotelian notion of analogy was preserved.

Cajetan named several kinds of analogy that had been used but previously unnamed, particularly: 

• Analogy of attribution (analogia attributionis) or improper proportionality, e.g., "This food is healthy."
• Analogy of proportionality (analogia proportionalitatis) or proper proportionality, e.g., "2 is to 1 as 4 is to 2", or "the goodness of humans is relative to their essence as the goodness of God is relative to God's essence."
• Metaphor, e.g., steely determination.

Identity of relation

In ancient Greek the word αναλογια (analogia) originally meant proportionality, in the mathematical sense, and it was indeed sometimes translated to Latin as proportio. Analogy was understood as identity of relation between any two ordered pairs, whether of mathematical nature or not.

Analogy and abstraction are different cognitive processes, and analogy is often an easier one. This analogy is not comparing all the properties between a hand and a foot, but rather comparing the relationship between a hand and its palm to a foot and its sole. While a hand and a foot have many dissimilarities, the analogy focuses on their similarity in having an inner surface.

The same notion of analogy was used in the US-based SAT college admission tests, that included "analogy questions" in the form "A is to B as C is to what?" For example, "Hand is to palm as foot is to ____?" These questions were usually given in the Aristotelian format: HAND : PALM : : FOOT : ____ While most competent English speakers will immediately give the right answer to the analogy question (sole), it is more difficult to identify and describe the exact relation that holds both between pairs such as hand and palm, and between foot and sole. This relation is not apparent in some lexical definitions of palm and sole, where the former is defined as the inner surface of the hand, and the latter as the underside of the foot.

Kant's Critique of Judgment held to this notion of analogy, arguing that there can be exactly the same relation between two completely different objects.

Shared abstraction

In several cultures, the Sun is the source of an analogy to God.

Greek philosophers such as Plato and Aristotle used a wider notion of analogy. They saw analogy as a shared abstraction. Analogous objects did not share necessarily a relation, but also an idea, a pattern, a regularity, an attribute, an effect or a philosophy. These authors also accepted that comparisons, metaphors and "images" (allegories) could be used as arguments, and sometimes they called them analogies. Analogies should also make those abstractions easier to understand and give confidence to those who use them.

James Francis Ross in Portraying Analogy (1982), the first substantive examination of the topic since Cajetan's De Nominum Analogia, demonstrated that analogy is a systematic and universal feature of natural languages, with identifiable and law-like characteristics which explain how the meanings of words in a sentence are interdependent.

Special case of induction

On the contrary, Ibn Taymiyya, Francis Bacon and later John Stuart Mill argued that analogy is simply a special case of induction. In their view analogy is an inductive inference from common known attributes to another probable common attribute, which is known about only in the source of the analogy, in the following form:

Premises

a is C, D, E, F, G

b is C, D, E, F

Conclusion

b is probably G.

Shared structure

According to Shelley (2003), the study of the coelacanth drew heavily on analogies from other fish.

Contemporary cognitive scientists use a wide notion of analogy, extensionally close to that of Plato and Aristotle, but framed by Gentner's (1983) structure mapping theory. The same idea of mapping between source and target is used by conceptual metaphor and conceptual blending theorists. Structure mapping theory concerns both psychology and computer science. According to this view, analogy depends on the mapping or alignment of the elements of source and target. The mapping takes place not only between objects, but also between relations of objects and between relations of relations. The whole mapping yields the assignment of a predicate or a relation to the target. Structure mapping theory has been applied and has found considerable confirmation in psychology. It has had reasonable success in computer science and artificial intelligence (see below). Some studies extended the approach to specific subjects, such as metaphor and similarity.

Applications and types

Logic

Logicians analyze how analogical reasoning is used in arguments from analogy.

An analogy can be stated using is to and as when representing the analogous relationship between two pairs of expressions, for example, "Smile is to mouth, as wink is to eye." In the field of mathematics and logic, this can be formalized with colon notation to represent the relationships, using single colon for ratio, and double colon for equality.

In the field of testing, the colon notation of ratios and equality is often borrowed, so that the example above might be rendered, "Smile : mouth :: wink : eye" and pronounced the same way.

Linguistics

• An analogy can be the linguistic process that reduces word forms thought to break rules to more common forms that follow these rules. For example, the English verb help once had the preterite (simple past tense in English) holp and the past participle holpen. These old-fashioned forms have been discarded and replaced by helped by using the power of analogy (or by applying the more frequently used Verb-ed rule.) This is called morphological leveling. Analogies can sometimes create rule-breaking forms; one example is the American English past tense form of dive: dove, formed on analogy with words such as drive: drove.
• Neologisms can also be formed by analogy with existing words. A good example is software, formed by analogy with hardware; other analogous neologisms such as firmware and vapourware have followed. Another example is the humorous term underwhelm, formed by analogy with overwhelm.
• Some people present analogy as an alternative to generative rules for explaining the productive formation of structures such as words. Others argue that they are in fact the same and that rules are analogies that have essentially become standard parts of the linguistic system, whereas clearer cases of analogy have simply not (yet) done so (e.g. Langacker 1987.445–447). This view agrees with the current views of analogy in cognitive science which are discussed above.

Analogy is also a term used in the Neogrammarian school of thought as a catch-all to describe any morphological change in a language that cannot be explained merely sound change or borrowing.

Science

Analogies are mainly used as a means of creating new ideas and hypotheses, or testing them, which is called a heuristic function of analogical reasoning.

Analogical arguments can also be probative, meaning that they serve as a means of proving the rightness of particular theses and theories. This application of analogical reasoning in science is debatable. Analogy can help prove important theories, especially in those kinds of science in which logical or empirical proof is not possible such as theology, philosophy or cosmology when it relates to those areas of the cosmos (the universe) that are beyond any data-based observation and knowledge about them stems from the human insight and thinking outside the senses.

Analogy can be used in theoretical and applied sciences in the form of models or simulations which can be considered as strong indications of probable correctness. Other, much weaker, analogies may also assist in understanding and describing nuanced or key functional behaviours of systems that are otherwise difficult to grasp or prove. For instance, an analogy used in physics textbooks compares electrical circuits to hydraulic circuits. Another example is the analogue ear based on electrical, electronic or mechanical devices.

Mathematics

Some types of analogies can have a precise mathematical formulation through the concept of isomorphism. In detail, this means that if two mathematical structures are of the same type, an analogy between them can be thought of as a bijection which preserves some or all of the relevant structure. For example, ${\displaystyle {\mathbb{R}}^2}$ and ${\displaystyle \mathbb{C}}$ are isomorphic as vector spaces, but the complex numbers, ${\displaystyle \mathbb{C}}$, have more structure than ${\displaystyle {\mathbb{R}}^2}$ does: ${\displaystyle \mathbb{C}}$ is a field as well as a vector space.

Category theory takes the idea of mathematical analogy much further with the concept of functors. Given two categories C and D, a functor f from C to D can be thought of as an analogy between C and D, because f has to map objects of C to objects of D and arrows of C to arrows of D in such a way that the structure of their respective parts is preserved. This is similar to the structure mapping theory of analogy of Dedre Gentner, because it formalises the idea of analogy as a function which makes certain conditions true.

Artificial intelligence

Further information: case-based reasoning

Further information: structure-mapping theory

A computer algorithm has achieved human-level performance on multiple-choice analogy questions from the SAT test. The algorithm measures the similarity of relations between pairs of words (e.g., the similarity between the pairs HAND:PALM and FOOT:SOLE) by statistically analysing a large collection of text. It answers SAT questions by selecting the choice with the highest relational similarity.

The analogical reasoning in the human mind is free of the false inferences plaguing conventional artificial intelligence models, (called systematicity). Steven Phillips and William H. Wilson use category theory to mathematically demonstrate how such reasoning could arise naturally by using relationships between the internal arrows that keep the internal structures of the categories rather than the mere relationships between the objects (called "representational states"). Thus, the mind, and more intelligent AIs, may use analogies between domains whose internal structures transform naturally and reject those that do not.

Keith Holyoak and Paul Thagard (1997) developed their multiconstraint theory within structure mapping theory. They defend that the "coherence" of an analogy depends on structural consistency, semantic similarity and purpose. Structural consistency is the highest when the analogy is an isomorphism, although lower levels can be used as well. Similarity demands that the mapping connects similar elements and relationships between source and target, at any level of abstraction. It is the highest when there are identical relations and when connected elements have many identical attributes. An analogy achieves its purpose if it helps solve the problem at hand. The multiconstraint theory faces some difficulties when there are multiple sources, but these can be overcome. Hummel and Holyoak (2005) recast the multiconstraint theory within a neural network architecture. A problem for the multiconstraint theory arises from its concept of similarity, which, in this respect, is not obviously different from analogy itself. Computer applications demand that there are some identical attributes or relations at some level of abstraction. The model was extended (Doumas, Hummel, and Sandhofer, 2008) to learn relations from unstructured examples (providing the only current account of how symbolic representations can be learned from examples).

Mark Keane and Brayshaw (1988) developed their Incremental Analogy Machine (IAM) to include working memory constraints as well as structural, semantic and pragmatic constraints, so that a subset of the base analogue is selected and mapping from base to target occurs in series. Empirical evidence shows that humans are better at using and creating analogies when the information is presented in an order where an item and its analogue are placed together.

Eqaan Doug and his team challenged the shared structure theory and mostly its applications in computer science. They argue that there is no clear line between perception, including high-level perception, and analogical thinking. In fact, analogy occurs not only after, but also before and at the same time as high-level perception. In high-level perception, humans make representations by selecting relevant information from low-level stimuli. Perception is necessary for analogy, but analogy is also necessary for high-level perception. Chalmers et al. concludes that analogy actually is high-level perception. Forbus et al. (1998) claim that this is only a metaphor. It has been argued (Morrison and Dietrich 1995) that Hofstadter's and Gentner's groups do not defend opposite views, but are instead dealing with different aspects of analogy.

Anatomy

See also: Analogy (biology)

In anatomy, two anatomical structures are considered to be analogous when they serve similar functions but are not evolutionarily related, such as the legs of vertebrates and the legs of insects. Analogous structures are the result of independent evolution and should be contrasted with structures which shared an evolutionary line.

Engineering

Often a physical prototype is built to model and represent some other physical object. For example, wind tunnels are used to test scale models of wings and aircraft which are analogous to (correspond to) full-size wings and aircraft.

For example, the MONIAC (an analogue computer) used the flow of water in its pipes as an analogue to the flow of money in an economy.

Cybernetics

Where two or more biological or physical participants meet, they communicate and the stresses produced describe internal models of the participants. Pask in his conversation theory asserts an analogy that describes both similarities and differences between any pair of the participants' internal models or concepts exists.

History

In historical science, comparative historical analysis often uses the concept of analogy and analogical reasoning. Recent methods involving calculation operate on large document archives, allowing for analogical or corresponding terms from the past to be found as a response to random questions by users (e.g., Myanmar - Burma) and explained.

Morality

Analogical reasoning plays a very important part in morality. This may be because morality is supposed to be impartial and fair. If it is wrong to do something in a situation A, and situation B corresponds to A in all related features, then it is also wrong to perform that action in situation B. Moral particularism accepts such reasoning, instead of deduction and induction, since only the first can be used regardless of any moral principles.

Psychology

Structure mapping theory

Main article: Structure-mapping theory

Structure mapping, originally proposed by Dedre Gentner, is a theory in psychology that describes the psychological processes involved in reasoning through, and learning from, analogies. More specifically, this theory aims to describe how familiar knowledge, or knowledge about a base domain, can be used to inform an individual's understanding of a less familiar idea, or a target domain. According to this theory, individuals view their knowledge of ideas, or domains, as interconnected structures. In other words, a domain is viewed as consisting of objects, their properties, and the relationships that characterise their interactions. The process of analogy then involves:

1. Recognising similar structures between the base and target domains.
2. Finding deeper similarities by mapping other relationships of a base domain to the target domain.
3. Cross-checking those findings against existing knowledge of the target domain.

In general, it has been found that people prefer analogies where the two systems correspond highly to each other (e.g. have similar relationships across the domains as opposed to just having similar objects across domains) when these people try to compare and contrast the systems. This is also known as the systematicity principle.

An example that has been used to illustrate structure mapping theory comes from Gentner and Gentner (1983) and uses the base domain of flowing water and the target domain of electricity. In a system of flowing water, the water is carried through pipes and the rate of water flow is determined by the pressure of the water towers or hills. This relationship corresponds to that of electricity flowing through a circuit. In a circuit, the electricity is carried through wires and the current, or rate of flow of electricity, is determined by the voltage, or electrical pressure. Given the similarity in structure, or structural alignment, between these domains, structure mapping theory would predict that relationships from one of these domains, would be inferred in the other using analogy.

Children

Children do not always need prompting to make comparisons in order to learn abstract relationships. Eventually, children undergo a relational shift, after which they begin seeing similar relations across different situations instead of merely looking at matching objects. This is critical in their cognitive development as continuing to focus on specific objects would reduce children's ability to learn abstract patterns and reason analogically. Interestingly, some researchers have proposed that children's basic brain functions (i.e., working memory and inhibitory control) do not drive this relational shift. Instead, it is driven by their relational knowledge, such as having labels for the objects that make the relationships clearer(see previous section). However, there is not enough evidence to determine whether the relational shift is actually because basic brain functions become better or relational knowledge becomes deeper.

Additionally, research has identified several factors that may increase the likelihood that a child may spontaneously engage in comparison and learn an abstract relationship, without the need for prompts. Comparison is more likely when the objects to be compared are close together in space and/or time,  are highly similar (although not so similar that they match, which interfere with identifying relationships), or share common labels.

Law

In law, analogy is primarily used to resolve issues on which there is no previous authority. A distinction can be made between analogical reasoning employed in statutory law and analogical reasoning present in precedential law (case law).

Statutory

In statutory law analogy is used in order to fill the so-called lacunas, gaps or loopholes.

• A gap arises when a specific case or legal issue is not clearly dealt with in written law. Then, one may identify a provision required by law which covers the cases that are similar to the case at hand and apply this provision to this case by analogy. Such a gap, in civil law countries, is referred to as a gap extra legem (outside of the law), while analogy which closes it is termed analogy extra legem (outside of the law). The very case at hand is named: an unprovided case.

• A second gap comes into being when there is a law-controlled provision which applies to the case at hand but this provision leads in this case to an unwanted outcome. Then, one may try to find another law-controlled provision that covers cases similar to the case at hand, using analogy to act upon this provision instead of the provision that applies to it directly. This kind of gap is called a gap contra legem (against the law), while analogy which fills this gap is referred to as analogy contra legem (against the law).

• A third gap occurs where a law-controlled provision regulates the case at hand, but is unclear or ambiguous. In such circumstances, to decide the case at hand, one may try to find out what this provision means by relying on law-controlled provisions which address cases that are similar to the case at hand or other cases that are regulated by this unclear/ambiguous provision for help. A gap of this type is named gap intra legem (within the law) and analogy which deals with it is referred to as analogy intra legem (within the law). In Equity, the expression infra legem is used (below the law).

The similarity upon which law-controlled analogy depends on may depend on the resemblance of raw facts of the cases being compared, the purpose (the so-called ratio legis which is generally the will of the legislature) of a law-controlled provision which is applied by analogy or some other sources.

Law-controlled analogy may be also based upon more than one statutory provision or even a spirit of law. In the latter case, it is called analogia iuris (from the law in general) as opposed to analogia legis (from a specific legal provision or provisions).

Case

Main article: case law

In case law (precedential law), analogies can be drawn from precedent cases. The judge who decides the case at hand may find that the facts of this case are similar to the facts of one of the prior cases to an extent that the outcomes of these cases are treated as the same or similar: stare decesis. Such use of analogy in precedential law is related or connected to the so-called cases of first impression in name, i.e. the cases which have not been regulated by any binding judge's precedent (are not covered by a precedential rule of such a precedent).

Reasoning from (dis)analogy is also sufficiently employed, while a judge is distinguishing a precedent. That is, upon the discerned differences between the case at hand and the precedential case, a judge rejects to decide the case upon the precedent whose precedential rule embraces the case at hand.

There is also much room for some other uses of analogy in precedential law. One of them is resort to analogical reasoning, while resolving the conflict between two or more precedents which all apply to the case at hand despite dictating different legal outcomes for that case. Analogy can also take part in verifying the contents of ratio decidendi, deciding upon precedents that have become irrelevant or quoting precedents form other jurisdictions. It is visible in legal Education, notably in the US (the so-called 'case method').

Restrictions and Civil Law

Further information: Nulla poena sine lege

Further information: Principle of typicality

The law of every jurisdiction is different. In legal matters, sometimes the use of analogy is forbidden (by the very law or common agreement between judges and scholars): the most common instances concern criminal, international, administrative and tax law, especially in jurisdictions which do not have a common law system. For example:

• Analogy should not be resorted to in criminal matters whenever its outcome would be unfavorable to the accused or suspect. Such a ban finds its footing in the principle: "nullum crimen, nulla poena sine lege", which is understood in the way that there is no crime (punishment) unless it is plainly provided for in a law-controlled provision or an already existing judicial precedent.

• Analogy should be applied with caution in the domain of tax law. Here, the principle: "nullum tributum sine lege" justifies a general ban on the usage of analogy that would lead to an increase in taxation or whose results would – for some other reason – be harmful to the interests of taxpayers.

• Extending by analogy those provisions of administrative law that restrict human rights and the rights of the citizens (particularly the category of the so-called "individual rights" or "basic rights") is prohibited in many jurisdictions. Analogy generally should also not be resorted to in order to make the citizen's burdens and obligations larger.

• The other limitations on the use of analogy in law, among many others, apply to:
  • the analogical extension of statutory provisions that involve exceptions to more general law-controlled regulation or provisions (this restriction flows from the well-known, especially in civil law continental legal systems, Latin maxims: "exceptiones non sunt excendentae", "exception est strictissimae interpretationis" and "singularia non sunt extendenda")
  • the usage of an analogical argument with regard to those law-controlled provisions which comprise lists (enumerations)
  • extending by analogy those law-controlled provisions that give the impression that the Legislator intended to regulate some issues in an exclusive (exhaustive) manner (such a manner is especially implied when the wording of a given statutory provision involves such pointers as: "only", "exclusively", "solely", "always", "never") or which have a plain precise meaning.

In civil law jurisdictions, analogy may be permitted or required by law. But also in this branch of law there are some restrictions confining the possible scope of the use of an analogical argument. Such is, for instance, the prohibition to use analogy in relation to provisions regarding time limits or a general ban on the recourse to analogical arguments which lead to extension of those statutory provisions which envisage some obligations or burdens or which order (mandate) something. The other examples concern the usage of analogy in the field of property law, especially when one is going to create some new property rights by it or to extend these statutory provisions whose terms are unambiguous (unequivocal) and plain (clear), e.g.: be of or under a certain age.

Teaching strategies

Analogies as defined in rhetoric are a comparison between words, but an analogy more generally can also be used to illustrate and teach. To enlighten pupils on the relations between or within certain concepts, items or phenomena, a teacher may refer to other concepts, items or phenomena that pupils are more familiar with. It may help to create or clarify one theory (or theoretical model) via the workings of another theory (or theoretical model). Thus an analogy, as used in teaching, would be comparing a topic that students are already familiar with, with a new topic that is being introduced, so that students can get a better understanding of the new topic by relating back to existing knowledge. This can be particularly helpful when the analogy serves across different disciplines: indeed, there are various teaching innovations now emerging that use sight-based analogies for teaching and research across subjects such as science and the humanities.

Shawn Glynn, a professor in the department of educational psychology and instructional technology at the University of Georgia, developed a theory on teaching with analogies and developed steps to explain the process of teaching with this method. The steps for teaching with analogies are as follows: Step one is introducing the new topic that is about to be taught and giving some general knowledge on the subject. Step two is reviewing the concept that the students already know to ensure they have the proper knowledge to assess the similarities between the two concepts. Step three is finding relevant features within the analogy of the two concepts. Step four is finding similarities between the two concepts so students are able to compare and contrast them in order to understand. Step five is indicating where the analogy breaks down between the two concepts. And finally, step six is drawing a conclusion about the analogy and comparing the new material with the already learned material. Typically this method is used to learn topics in science.

In 1989, teacher Kerry Ruef began a program titled The Private Eye Project. It is a method of teaching that revolves around using analogies in the classroom to better explain topics. She thought of the idea to use analogies as a part of curriculum because she was observing objects once and she said, "my mind was noting what else each object reminded me of..." This led her to teach with the question, "what does [the subject or topic] remind you of?" The idea of comparing subjects and concepts led to the development of The Private Eye Project as a method of teaching. The program is designed to build critical thinking skills with analogies as one of the main themes revolving around it. While Glynn focuses on using analogies to teach science, The Private Eye Project can be used for any subject including writing, math, art, social studies, and invention. It is now used by thousands of schools around the country.

Religion

Catholicism

The Fourth Lateran Council of 1215 taught: For between creator and creature there can be noted no similarity so great that a greater dissimilarity cannot be seen between them.

The theological exploration of this subject is called the analogia entis. The consequence of this theory is that all true statements concerning God (excluding the concrete details of Jesus' earthly life) are rough analogies, without implying any falsehood. Such analogical and true statements would include God is, God is Love, God is a consuming fire, God is near to all who call him, or God as Trinity, where being, love, fire, distance, number must be classed as analogies that allow human cognition of what is infinitely beyond positive or negative language.

The use of theological statements in syllogisms must take into account their analogical essence, in that every analogy breaks down when stretched beyond its intended meaning.

Islam

Further information: Qiyas

Islamic jurisprudence makes ample use of analogy as a means of making conclusions from outside sources of law. The bounds and rules employed to make analogical deduction vary greatly between madhhabs and to a lesser extent individual scholars. It is nonetheless a generally accepted source of law within jurisprudential epistemology, with the chief opposition to it forming the dhahiri (ostensiblist) school.