Despite all the knowledge that we possess as humans we are still animals and that means we are all influenced by inherent biases and other tendencies that can lead people to fall into the same traps time and time again.
When gambling we are either betting on random chance or luck, as with most casino games, or we are betting that we can predict something to be true, as with most sports bets. We know that the house always wins on average but those that bet rationally and can control their biases and natural tendencies can do better in the long run.
Of course, sportsbooks and casinos know very well how to exploit the psychology around gambling to take advantage of customers. Therefore, it is critical to understand what the psychological factors are present when betting and how to stop yourself falling into the same old traps.
Here we break down various psychological tendencies to hopefully help you to make your decisions around gambling more rationally. There is a bit of science thrown in to explain why biases work the way they do but don’t worry, these articles are designed to be understood by the typical punter too.
Availability heuristic or availability bias is the tendency we all have to assign more importance to events that affect us more, are easier to remember or make a big impression on us. The idea that you may drop someone at a train station and say ‘have a safe journey’, when in reality they should say that to you as the risks of death and injury on the roads is far higher than on trains.
This can be summed up as something that causes us to misjudge the real probabilities of events occurring, which can have a very obvious impact on gambling. Here we explore how availability heuristic applies to betting and how you can avoid it.
Of all the inherent human biases we talk about on this page confirmation bias will be the one people are most familiar with it. Still, just because people know what it is doesn’t stop them being influenced by it, like most biases it affects us mostly on a subconscious level and so we need to actually think about it to stop us being led by it.
Confirmation bias is the idea that we let our opinions, prior beliefs or previous happenings affect our future decisions. This has a very obvious influence on betting and gambling.
Hindsight is a wonderful thing, or so the saying goes, but in reality hindsight can be a dangerous thing as it can make us believe, falsely, that we knew something was going to happen all along. Of course in betting that can lead to bad future decisions and subsequently loses.
You don’t need to be a psychologist to know about hindsight but despite the fact we all understand what it is doesn’t necessarily stop us falling into the trap. Hindsight bias is actually more powerful when a negative result happens than a positive result. Find out more.
The Green Lumber Problem was described by Nassim Nicholas Taleb in his book Antifragile: Things That Gain From Disorder. It is based around the idea that one of the most successful men in trading wood, Joe Siegel, made a lot of money selling green lumber, believing for his entire career that it was painted green, when in fact it was only green because it was fresh wood.
The basic principle is that you don’t need to understand the intricacies of how something works in order to exploit it. What many people regard as ‘knowledge’ is in fact unimportant. This obviously applies to betting, where people may believe because they ‘know’ a sport they will be more successful betting on it. In fact, the most crucial thing is understanding the market itself.