The Illusion Of Knowledge In Betting And Gambling

psychedelic brain icon illusion of knowledgeOne of the most damaging thing to bettors is the illusion of knowledge. It isn’t exclusive to bettors, of course. Experts in almost any field fear being made to look like the don’t know what they’re talking about, so they will blag knowledge over a subject even when the thing that they’re talking about is entirely made up.

The bad news for bettors is that it can end up costing them money, largely due to the fact that they think they know what they’re talking about when they actually don’t. Generally speaking, a little knowledge is not useful to bettors.

Imagine a scenario in which you’ve watched a football team for a few matches and notice that they always seem to concede first. You place bets on them conceding the first goal in a match and win some money as a result. Consequently, you continue to place bets on the team conceding the first goal, never going back to the data to see whether you’re right or not.

Six months after you watched a few of the team’s matches, they have a new manager and new players and no longer concede first, but you’re still placing that same bet based on your original knowledge.

The Best Bettors Are Always Learning

risk planning people pointing at charts on a deskIn the vast majority of cases, people are not willing to critique their own beliefs. As a result, they will continue to believe something that they could soon find out is untrue if they were just willing to do a little bit of research.

Rather than looking at what they know and questioning it, however, a lot of people convince themselves that they have knowledge when they actually don’t. This illusion of knowledge is a dangerous thing for those that like to place bets on things, because they can convince themselves of things that aren’t true.

The best bettors in the world are always looking to learn. They never rest on their laurels and do what they can to stop themselves from assuming anything. Yes, they might have had a system for betting on horses that worked six months ago, but is the data that they used to come up with that system still valid?

Are the traps at a flat racing course still showing the same bias? The top bettors will constantly be evaluating what they know and checking their knowledge against readily available facts, assuming nothing is certain.  They don’t make quick decisions on assumed knowledge.

Don’t Trust Your Own Knowledge

Brain MoneyIf you are a big fan of a football club, you might well have convinced yourself that you know all about them. There are players that you know will do certain things in matches, say, or teams that you are certain are your side’s bogey team.

The problem is, a lot of that may not actually be true. Yes, you might have lost to Crystal Palace, say, three times out of the last four, but that doesn’t mean that you’re going to lose to them in the fifth match. This small amount of knowledge that you have but never question can be a dangerous thing.

In a study by Prof. Dannon and Dr. Ronen Huberfeld of the Beer Yaakov Mental Health Center, published in the journal Pschopathology, it was revealed that the two most successful gamblers that they looked at had no knowledge of the sport that they were betting on, nor previous experience of gambling. It revealed, they felt, that sports bettors tended to operate under an illusion of power and control rather than the real thing.

Punters with some knowledge didn’t do as much research as those without any because they felt that they already ‘knew’ what the were betting on.  This related to the green lumber fallacy, which in effect shows that you don’t need to understand the ins and outs of something to be an expert, you simply need to understand the aspects that have the biggest effect on the potential outcome.

Knowledge Isn’t A Predictor Of Success

Mathematics Success

When experiments were carried out on a group of people, it was expected that those with prior knowledge of the sport would be well-placed to succeed in the gambling that they were asked to carry out.

Three groups of participants were brought together, made up of 52 professional sports gamblers, 34 football fans who knew the sport but had never gambled and 78 non-gamblers who didn’t know anything about football at all. They were asked to place bets on the 16 matches of the Champions League, organised by UEFA.

The participants were asked to place bets on what they thought the final scores would be. There was no discernible difference between all of the groups, with those that had prior knowledge of the sport doing no better than the others.

Two participants correctly predicted seven of the 16 matches, which was the most of any participants. They came from the group that had no previous understand of football as a sport, showing that knowledge as a concept is not enough in and of itself to be an indicator of success when placing bets.

How To Avoid Falling Into The Knowledge Trap

avoid spelt using letter blocksA little knowledge does not, in fact, go a long way. In spite of what a lot of people may think, those that have knowledge of a subject that they’re betting on end up not being able to separate their knowledge from what they actually need to know for their bets to be successful.

In order to ensure that you don’t fall into the same trap when placing wagers, you would be well-placed to forget everything that you think you know. If you’re betting on your favourite sports team, for example, imagine that you’ve never heard of them before.

Forget what you have ‘learnt’ from your time watching a team or a sport and instead look at the stats in a cold and calculating manner. What do the facts and figures tell you about what you should be betting on?

Disabuse yourself of the illusion of knowledge and instead approach it as those with absolutely no knowledge of the subject matter would. Look at the numbers and the facts, especially if what they’re telling you flies in the face of what you thought you knew. Remove any sense of ‘knowledge’ and treat every bet as though it’s your first.