The clustering illusion is the human tendency to see patterns where they do not exist. Basically, humans are pattern machines. That is why people tend to recognize things from their patterns compared to full details. While this is useful, it also means that humans can erroneously see patterns where they are none.
When people encounter random clusters, they naturally impose a pattern. This is an instinctive response to help humans bring order to chaos. The illusion that random cluster are an indication of a pattern is very common in gambling. After losing out several times, gamblers are often convinced that the machine has been holding out long enough and payout is due which keeps them gambling.
A simple approach to understand this concept is to imagine casting ten coins in a 1 foot square space. In normal circumstances, some pennies will fall close to each other compared to others. Such coins are likely to be perceived as forming a group or cluster from the random distribution.
The Texas sharpshooter fallacy
This is an informal fallacy which is committed when discrepancies in data are ignored while similarities are emphasized. When too much emphasis is placed on similarities while ignoring the differences, people make false conclusions.
The fallacy’s name was derived from a joke about a Texan who shot at the barn and then drew a target around the holes claiming he was a sharpshooter. This is what happens when you find a cluster of things or events in a sea of randomness and draw your target around the cluster. You do this because the human brain expects to find cluster in the real world.
Bad omens or coincidences
Since humans are poor at understanding random events for what they are, they prefer to see coincidences as indicators of a cosmic errors (omens) for which they must suffer from. Your brain chemistry is such that it looks for patterns in your life to try and solve issues as well as prove that what you are experiencing is emanating from the outside and not from within.
Apophenia and schizophrenia
There is a common belief among basketball fans, players and coaches that players have cold or hot streaks. To demystify the concept, scientists studied the Philadelphia 76er’s and showed that their cold or hot shooting streaks were nothing more than what occurs randomly.
This tendency to see connection even where they are none was referred as Apophenia by Klaus Conrad, a psychiatrist. Conrad sought to show that the tendency to see patterns in randomness is delusional thinking and may occur due to the onset of schizophrenia. Conrad’s psychological theories on the genesis of schizophrenia seek to show that a person suffering from that condition usually perceives delusions as revelations.