A large majority of gamblers and sports bettors who place bets on portals like Bet365 etc. or offline, have a habit of trusting their gut instincts when indulging in any gambling or sports betting activity. They do this without realising and paying heed to the fact that relying on some ready-made thumb rules – often referred to as heuristics in the field of psychology – can result in poor decisions. Let’s find out about some of the most commonly observed heuristics and how you can avoid them on a consistent basis.
Evolution is a very big reason why a large number of people depend on heuristics. Our forefathers and ancestors often used to develop some quick fire methods whenever they used to be faced with complicated and life-threatening issues. To tell you the truth, they simply didn’t have enough time to weigh up such situations! Many of those quick fire methods later got passed down through several generations. In fact, we continue relying on a large number of them even today, more often than we’d actually like to!
An introduction to the some of the most commonly known heuristics
Anchoring has an impact on people’s ability of estimating the most likely number of items of a certain kind or the most likely value in a sequence. For instance:
A group of people was asked to guess the actual percentage of African countries that are a part of the United Nations. Even before answering this question, they were subjected to a random process of generating a number or the anchor, and were then questioned if the African Nations’ percentage in United Nations was below or above that particular (generated) anchor. It is only then that they had to make an actual estimate of the African countries that are a part of the United Nations. The provided estimates tracked the anchor, despite the fact that the participants knew that it was random.
These individuals anchor their estimate to an entirely arbitrary point without even realising it. Why this happens is because the anchor is viewed in the form of a working hypothesis or a starting point which an individual feels reluctant to move away from.
You’ll find a large number of marketing executives consistently exploiting this phenomenon. It is highly relevant to gambling and betting situations too, regardless of whether you gamble in offline environments or some online casino. Sports bettors and gamblers should be aware that many such anchors exist in the way bets are worded too. They should also understand how the spread values and handicaps can possibly influence their judgements, without them even realising.
About availability bias
This type of bias is regularly seen in sports bettors and gamblers owing to their natural tendency of attaching greater importance to events which leave strong impressions on them, or events which are pretty easy for them to recall.
Some of the commonly known examples of availability bias are the manner in which people overestimate risks associated with traumatic or dramatic events, for instance earthquakes, terrorist attacks, tsunamis, floods etc. You’ll see the sale of tsunami related insurance plans quickly going up immediately after a tsunami or an earthquake, despite the fact that it’s risk may actually diminish significantly post its happening. Furthermore, people are often ready to shell out higher premium amounts to insure themselves against death from terrorist acts, instead of insuring themselves against death of any kind (that would automatically include terrorist acts too).
Talking specifically from the perspective of sports betting and gambling on an offline or online casino, it is important to be aware of assigning greater significance to more memorable and / or recent results. You should ask yourself if you will find it easier to remember a high-scoring match or a lame 0 – 0 draw?! It’s most likely to be the former, right?! However, that doesn’t say anything about its probability or chances to happen actually. You’ll often see that in football, sports bettors have a tendency of over estimating the chances and frequency of events such as corners, red cards, penalty kicks etc. simply because they are of great significance and can be easily recalled. It impacts their betting behaviour and perceived probability too.
This is also linked to the common phenomenon of sports bettors buying on a spread or backing the over in the totals market on portals like Bet365 and others, as the availability bias causes them to draw wrong conclusions about the likelihood of the concerned event than what may be the reality.
This type of heuristic describes the manner in which people are inclined to demonstrate higher diversity when they are confronted with simultaneous choices instead of the sequential ones. For example:
When people are asked to make individual choices of five chocolates each from a selection box (consisting of equal number of chocolate varieties), they display a tendency of making more diverse selections compared to when they have to make five choices in a sequence.
When it comes to gambling and sports betting on platforms like Bet365 etc., punters have a tendency of making higher investments whenever an opportunity seems like being more diversified in nature. An excellent example of this is backing the away team and the possibility of a draw, based on the idea and perception of it being a more diversified bet, compared to simple laying of the home team. There’s actually no logical reasoning behind why you should be betting more money, unless of course if there is higher than expected value in the bet.
Escalation of the sunk cost or the commitment cost
This type of heuristic very well describes the phenomenon of people feeling compelled to justify certain commitments, by increasing the amount of their cumulative investment, regardless of the fact that the potential costs going forward are most likely to far outweigh the potential benefits.
“Throwing good money after bad” is one of the best ways that psychologists describe this tendency. A very good example of this would be the tendency of people sitting through a feature film they may not enjoy at all, simply because they’ve already invested a certain amount of money and time into it. As a result, they feel bound to justify their investment.
Talking purely from the perspective of sports betting and gambling activity on an offline / online casino, this is regularly seen in case of punters when they keep persisting with a bet which is most likely to make them incur huge costs in the future, rather than accepting a smaller and certain immediate loss. People when placed in such situations have a tendency of displaying irrational determination for justifying their original decisions, rather than opting to cut their losses.
About the gambler’s fallacy or representativeness
Sports betting and gambling psychologists have often witnessed that people have a tendency of believing short sequences of random events to be good representativeness of the longer ones. They do this completely ignoring the fact that all such events are actually statistically independent of each other. For example:
The gambler’s fallacy is also popularly referred to as the Monte Carlo fallacy owing to the fact that out of red and black, black came up exactly 26 times straight on a certain roulette table at a Monte Carlo Casino in the year 1913. So, once the Black had come the 15th straight time, all gamblers started betting heavily on the possibility of a red, assuming that the chances of getting one more black had become astronomical, thus displaying an irrational belief that one spin of the roulette wheel somehow has an impact on the next.
This gambler’s fallacy can be found to have a close relation with the hot hand fallacy, which is a lot about believing in winning or losing streaks or streaks of bad or good luck. Whenever someone experiences what may seem like an atypical sequence of events, he may make some sort of special conclusion from it, for instance, ‘I am out of luck’ or ‘I am currently on a hot winning streak!’
This has come to be widely recognised as hot hand fallacy owing to a study carried out during 1980s. This study suggested that a basketball player who has successfully made a shot doesn’t have any specific advantage when he goes to take the next shot, simply because of his initial success. He can’t expect himself to be successful the next time just because he had a successful previous throw.
This phenomenon is particularly applicable to betting on random games of chances you play on platforms like Bet365 and others, for instance, dice games, lotteries, roulette, slot machines and more.
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You must remember that we humans are no machines. We have a tendency of viewing situations in a rational manner, however, our instincts can often get the better of us. This can be very expensive for gamblers and sports bettors. Hence, if you are someone who gambles or places sports bets on a regular basis you must ignore whatever your gut tells you unless of course it’s lunch or dinner time!
We highly suggest that you also read some of the works of Late Amos Tversky as well as Daniel Kahneman to increase your knowledge of heuristics and how they impact your betting behaviours and success / losses. This pair has been widely credited with some of the most amazing and groundbreaking work related to the field of cognitive biases. In fact, Daniel Kahneman was awarded the Nobel Memorial prize in the year 2002 for his contributions in the field of economics, despite not being an economist! If you go through one of his recent bestsellers titled “Thinking Fast, Thinking Slow,” which is a summary of all his work so far, you’ll feel as if your eyes have been opened about how people make some of the strangest decisions under uncertain situations; exactly what sports betting and gambling is all about!