Neuroscientists have long sought new ways to explain how and why human beings make certain decisions. The merging of neuroscience and economics has brought about some particularly interesting conclusions, including the fact that the brain reacts in the same way when an individual makes money as it does in chemically-induced highs. On the other hand, the brain interprets any financial losses as a massive low to be avoided.
Experiencing euphoria and avoiding negativity is something every human wants to do – and sports bettors are no different. Often, though, it is easy to fall victim to overthinking, and this can have an adverse effect on success.
Cognitive biases are barriers to objective thought which are caused by the brain’s inclination to interpret information through a prism of an individual’s own experiences and preferences. Needless to say, such biases can have a major impact in the field of sports betting, so understanding how the mind works is vital to anyone who wants to make a profit.
An example of this phenomenon can be found when someone looks down from a great height. Our ingrained fear of falling causes us to overestimate the drop, which is very useful as it promoted cautious behaviour – when the stakes are so high, it is better to take extra care. In sports betting, though, these mental shortcuts are not very useful and can be a reason for failure.
The decisions made by a bettor are influenced by his or her cognitive biases, and these can lead to significant errors even though they are reasonably straightforward for the brain to make sense of. As Georg Christoph Lichtenber, a German scientist, once said: “Once we know our weaknesses, they cease to do us any harm.”
Hindsight bias is a prominent cognitive bias in sports betting. This refers to the feeling of creeping determinism which takes place in our brains after an outcome has been decided. In a piece of research, renowned psychologist Thomas Gilovich applied this bias to sports betting by trying to measure how a bettor’s interpretation of his or her success impacted upon his or her’s subsequent choices.
For instance, if a football game was decided by fortune – such as a poor refereeing decision – both winners and losers stated that they would have made the same bets. Those who lost the bet focused on randomness, but the winners brushed this aside and focused on the result, which in their minds justified their choice even though the outcome was heavily influenced by luck. Gilvoch thus found that bettors are more likely to closely analyse failure than success.
In another experiment, he sought to find out how previous luck can affect future behaviour. In this case he found that losing bettors had their faith restored in the teams they backed after learning the result was determined by luck; at the same time, winning bettors’ faith was not reduced since the outcome was aligned with their prediction.
In summary, bettors can fall into the trap of becoming overly confident in their own skills when they do not analyse their triumphs as much as their failures. This is part of human nature, but it can have a negative impact on a bettor’s future success.
It is, however, not easy to overcome cognitive biases such as the hindsight bias. This is part of our makeup as human beings and, in many cases, something we cannot easily control.
Nevertheless, it is surely beneficial to at least be aware of the effects and make an effort to scrutinise successes as much as we would failures. After all, it could make the difference between profit and loss in the long-term.
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