A psychological process for the gamblers is equally crucial to their strategy. There is high excitement, then there’s sadness, when you lose – this rollercoaster of emotion drives them to abandon all their plans and ditch their betting plan altogether.
Overconfidence
Overconfidence is a well-known cognitive bias, that can cause decisions to be taken based on a flawed judgment of an event and lead to poor and risky decisions with devastating consequences – in gambling, but more broadly. So, we must know what it is, and how to evade it.
Illusion of control and confirmation bias – these cognitive biases also encourage overconfidence by seeking out evidence that supports old beliefs while overlooking or minimising countervailing information. This cognitive bias can be especially dangerous in a trading world where people are likely to make rash decisions.
A simple way to cope with overconfidence is to cultivate emotional resilience. These include embracing losses as normal and not dwelling on them; a solid support system; refraining from self-doubt; and recognizing the consequences of loss seeking.
Excitement
Excitement is a good emotion, which allows us to explore the world, be it that same sickly sensation you get in the pit of your stomach, a need for speed, or looking forward to something great. But a too high excitement could result in stupid and reckless choices with adverse outcomes.
Successful betting involves emotional regulation. You can also use mindfulness exercises and meditation to break free of your emotions like a rush. This helps to be objective in making a decision and calm in bet activity. What’s more, the break might enable your body to heal naturally and remain calm.
A bet can evoke similar neural pathways as morphine, but a loss can be cathartic. Sports betting is so often this rollercoaster of emotions and if you wish to more effectively manage emotions, it is important to establish and adhere to a budget.
Memory bias
Memory bias is when a person places excessive emphasis on new information, news or results in decisions. This is quite a regular feature in betting and causes people to act irrationally to make large bets or miss out – so knowing what it does can help us make better bets and save ourselves from costly mistakes.
Moreover, memory bias can be accounted for in part by its reliance on value as we have demonstrated in our experiments. In particular, our participants’ ratings on the frequency judgments test also corresponded to their risky choice behaviour and tended toward extreme outcomes (i.e. high peak and low valleys).
These results confirm the availability heuristic that accounts for the tendency to use quickly forgotten information when determining how frequent an event is, or how likely something is to occur. And finally, the results also support a dynamic model incorporating memory bias in consideration of return and risk when considering alternative positions over time.
Chasing losses.
This pursuit of losses is a widespread, even malignant habit of the gambling industry that will lead you into serious financial crisis. Chase losing is a tendency for people to raise their stakes after losing to recoup what was lost – this is a very dangerous activity that may be signs of gambling disorder.
Losses seeker can sway thought and drive individuals to premature, reckless choices that incur incalculable losses and distress. People may risk what they would not or bet higher stakes than they feel comfortable with, which could spiral them down a costly path of financial and emotional stress.
There is evidence that alexithymia personality trait and gambling losses pursued are correlated, with individuals with higher alexithymia levels having greater emotional distress or being less affected by consequences of actions undertaken and subsequent gambled losses pursued. This is why it is essential that we are alert to evidence of losing pursuit, in ourselves and others.