Gamblers are more impulsive and ‘see patterns’ where there are none

May 13, 2015

Credit: © astefanei / Fotolia

By Science Daily

Pathological gamblers “see” patterns in things that are actually quite random and not really there, to such a degree that they are quite willing to impulsively bet good money on such illusory nonrandomness. This is confirmed by Wolfgang Gaissmaier of the University of Konstanz in Germany and Andreas Wilke of Clarkson University in the USA, leaders of a study in Springer’s Journal of Gambling Studies that sheds light on why some people are gamblers and others not.

The findings of the study add to a large body of research that suggests that cognitive distortions (or people’s warped thinking), play an important role in pathological gambling. It provides further evidence for the assumption that gamblers are particularly prone to perceiving illusory patterns and are more impulsive than others.

Gaissmaier and Wilke’s team focused on probability matching, an anomaly of choice that is related to the perception of illusory patterns. In a laboratory setting, the researchers compared the betting habits of 91 habitual gamblers against 70 community members. Participants were shown a picture of a casino and two slot machines and had to predict on many trials whether a coin would be obtained from the slot machine on the right or the left. The probability of winning was higher on one slot machine (67 percent winning chance) than on the other (33 percent winning chance), and the order of outcomes was completely random.

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20 comments on “Gamblers are more impulsive and ‘see patterns’ where there are none

  • 2
    maria melo says:

    I guess Prof Dawkins made the same point in an episode of the meaning of life.
    I remember once a girl asked an ethologist conferencing if belief in God is a unique human feature (I guess he was nor comfortable
    answering, but funny that I learned from the same ethologist that dogs can bark at the door because they may think that if they do someone will be at the other side. (superstition in animals I think), the same superstition that make some objects sacred?.
    Just bad maths ?

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  • Gamblers, like the religious, believe in the superstition of magical powers– changing the laws of random chance by blowing on the dice or wearing a ‘lucky shirt’ etc. As one who worked in the gaming industry for years, people must understand these are not “games of chance”– they are designed for the house to win but “pay off” just enough to keep the credulous playing and coming back. I have seen people lose their entire life’s savings, their homes (signing over the mortgages), and even dying at the blackjack table because they could not tear themselves away long enough to take their medication and get some rest… Yes– while I was working (over a five year period), four customers died of heart attacks while sitting at the table playing blackjack. The “House” always wins because the gambling is “designed” with science to feed people’s addictions and superstitions… just like religion.

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  • The movies constantly reinforce the view that that hunches about gambling are invariably correct. We really should be teaching in schools why gamblers always inevitably lose, and why various pyramid schemes cannot work. I have often thought it odd that people play in casinos when they could gamble with their friends where there was no house taking a cut.

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  • My wife and I are friends with a couple. The husband, generally a solid guy, holds fast to all kinds of nonsense including the belief that cognitively gifted observers can discern patterns in purely random gaming, especially roulette. I’ve tried in vain to argue the principle of randomness but like all true believers he’s not going to budge. Apparently he believes in some kind of transcendent force overriding the laws of physics with respect to random chance and probability.

    Perhaps curiously, our friend is not a gambler all. I suspect there are a fair number of non-gamblers out there who believe in gambling superstitions as part of a basket of other convictions about paranormal phenomena like clairvoyance, mental telepathy, psycho-kinesis and so on.

    Gambling can become an addiction for anyone regardless of education, I.Q., profession or socio-economic status. The high of playing even more than positive reinforcement from the occasional win becomes an obsessive-compulsive need both physiologically and psychologically just like drug or alcohol abuse. The addict suffers withdrawal pain when he quits sometimes as strong as the euphoria he feels from the initial indulgence. Rehab is required.

    Probably the largest pool of gamblers, who occupy the spectrum from moderate to excessive, come from the poorly educated lower and lower middle income classes. These folks aspire against impossible odds to escape poor or austere work-exhausting lives by hitting the jackpot. I knew a man with a wife and two kids who quit his good job after winning a $25,000 exacta at the horse-racing track. Things did not work out well for him.

    (Kudos to Indygrl76 for sharing her illuminating experiences.)

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  • When I was a kid, I had a toy roulette wheel. I could do considerably better than break even. But that was because the wheel was made of plastic and was far from perfectly even. 0 and 00 never came up.

    It is also seems to me, than in playing monopoly, throwing a double 6 was extremely common. I don’t have an explanation for that.

    Perhaps these beliefs in ability to outguess gambling get burned in during childhood.

    I am one of the few people who tripled his lifetime gambling earnings. My Dad said that if you repeatedly gambled at a casino, you were doomed. You had some chance of winning if did only one bet in your life. So I stuck a nickel in a slot machine and won 15 cents.

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  • Gambling is just another drug addiction. Every fall of the card. Every press of the slot machine button will release a tiny squirt of hormones that hit the same receptors as cocaine. A winning button push will release a lot. But even more importantly, a losing spin also releases tiny amounts. Just approaching a slot machine begins the release of reward hormones. I’m still looking for the article. I found this abstract that found the same results.

    Problematic gambling is thought to be influenced by neurobiological mechanisms. However, the neuroendocrine response to gambling is largely unknown. Therefore, the effect of casino gambling on the sympathoadrenal system, the HPA-axis, and pituitary hormones were analyzed. Fourteen male problem gamblers and 15 non-problem gamblers were examined in a balanced cross-over design. In the experimental session, participants played blackjack in a casino wagering their own money. During the control session, subjects played cards for accumulation of points. Heart rate and endocrine measures were recorded at baseline, at 30, 60 and 90 min during gambling/card playing, and after the game. Heart rate and norepinephrine levels increased with the onset of blackjack in both groups, with problem gamblers showing significantly higher levels across the entire gambling session. In addition, dopamine levels were significantly higher in problem gamblers during casino gambling compared to non-problem gamblers. Cortisol levels were transiently increased with the onset of blackjack in both groups. Casino gambling as a “real life” situation induces activation of the HPA-axis and the sympathoadrenergic system, with significantly more pronounced changes in problem gamblers. These findings may contribute to a better understanding of neuroendocrine disturbances in problem gambling.

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  • I would dearly love to weed these people out from from our banks and trading floors. They’ve cost me (and you) dear.

    I would imagine that pattern spotting psychology tests could work rather well identifying both those prone to false positives and those truly capable.

    Regular testing with the incentivising of true positive identification (keep job, promotion, whatever) will create the motivation to find patterns. False positive scores perhaps coupled with a septum-erosion metric, limiting a maximum trade size, should steady things down nicely.

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  • 11
    NearlyNakedApe says:

    I would dearly love to weed these people out from from our banks and trading floors. They’ve cost me (and you) dear.

    I hear you.

    But here’s another suggestion: amending the trading rules and regulations to bring those back to pre-Reagan administration status would also help. That and the genuine ability and will of the regulating agencies to enforce those rules.

    However, I’m all for neuroscientific research into the subject and using the knowledge acquired from that research to establish psychological screening tests for the potential recruits in the trading business. The knowledge could also be useful in other fields of employment. Psychological screening for applicants in law enforcement for example. It could save lives as well as livelihoods.

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  • Completely agree, NearlyNA.

    The rolling back of the Class-Steagall legislation of 1933 was a criminal act all of its own. The problem was some whizzy mathematics in a new paper that showed that markets could be gamed with positive outcomes so long as the amounts “bet” were huge. These huge “sums” could beneficially skew the market when placed. Also financial “instruments” of the size required could be created by bundling up say mortgages, the complexity of which bundles permitted the surreptitious debasement with sub-primes. Everyone got shiny-and-dollar-sign-eyed. Sure fire profits and slowly burying debt, whats not to like….

    Putting things back to when they were first fixed would be a start.

    And as you might know legislation to favour longer term investments and disfavour short (gaming) ones would meet with approval from me. (I have proposed a quality control requirement to risk assess investments to avoid certain legal liabilities that would put work load into each transaction or accept the new liability to investors.)

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  • Phil is spot on to compare investments to “gambling” up to a point. Both involve “betting.” But there are also crucial differences between global financial markets and a casino. The dictum to buy low and sell high is (literally)and inherently dicey. Balancing the survey, we must first clear the table of scam artists and pyramid scheme entrepreneurs like Bernie Madoff along with those professional and amateurs who suffer from susceptibility to suggestion and delusions about the potential of high-risk investments. No amount of regulation, however, can remove caveat emptor from the arena.

    I can break out two general orientations to investment from a multitude of tactics. The first involves investing in a specific company which either has a good track record for profitability or shows promise for future higher earnings. Both investments involve risks, the latter more than the former, and the need to assess stability and prospects for the company. The second more prominent orientation is to invest in markets: derivatives, bundled securities, commodities trading, collateralized debt obligations and the like. Here the strategy is to jump in and out of markets with uncanny timing to the business cycle in order to make a profit and shield investment capital from losses. Indexed trading, leveraged investments made with borrowed money and short selling are key maneuvers.

    Needless to say high risks are involved in any form of investing. Unlike voluntary gambling in a gaming context, however we must all participate. In a capitalist economy, failure to grow money is fatal because of inflation. Unfortunately we cannot regulate our way out of economic uncertainty or always anticipate the rise and fall of myriad global business cycles. Governments must strive to protect consumers and savers aspiring to standards of rational judgement with balanced requirements and reasonable safeguards against reckless excesses. Not an easy task. Sadly we can seldom predict the consequences of complex economic developments because there are too many unknown and, yes, random variables nor do we have the benefit of hindsight when we are swept along in the impersonal -often irrational, hysterical and destructive forces of a global or national economy. No matter how conservatively and judiciously the individual or professional investor operates, the iron law of the business cycle alternately lifts and depletes fortunes. Recessions and the ultimate catastrophe of a depression always lurk in the background with the potential to destroy wealth, wounding or sometimes killing the most judicious investor.

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  • I think also the idea of something being completely random helps fuel the forced-pattern-finding. If something is truly random, one has no control over it, which can be intimidating and/or depressing for some people. So grasping to anything that resembles some kind of pattern makes them feel better about their gambling.

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  • 16
    NearlyNakedApe says:

    I wonder what would have happened if I’d won the bet.

    It’s hard to say but one thing is sure; losing does not deter true gamblers. They are in it for the thrill of the game. I’m willing to bet (pun intended) that you didn’t pursue this line because you don’t really have the gambling virus in you (not because you lost that day). And that’s a very good thing.

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  • I think the truth is that complex systems like financial markets are not random as chaotic. There is a significant mathematical difference between these two proprties, driven either by their respective nominally stochastic or deterministic natures. Chaotic systems may move between states of rapid random-appearing change to little lacunae of seeming stability. The location of these (in time) may strongly hint at patterns. Chaotic systems, with their feedback and non-linear inputs may also amplify any genuine low level noise at their inputs adding an appearance of stochasticism at times. Patterns are there for the finding but not reliably so.

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  • Indygrl76 – thanks – I found this insider’s perspective interesting. It reminds me of the video gamers who have died during long-haul tournaments because they haven’t slept, eaten, etc. for days. That the pleasure centers of the brain can override the survival mechanisms is quite remarkable. Your comparison to religion is appropriate. How many people have died sacrificing themselves for holy war or avoiding medicine or other such nonsense, because their brain has been programmed to perceive the religious impulses as more important than self-preservation of the body?

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  • I think the truth is that complex systems like financial markets are not random as chaotic. There is a significant mathematical difference between these two proprties, driven either by their respective nominally stochastic or deterministic natures.

    Markets are never stable because they are always moving though the upward or downward trend of a business cycle driven by supply and demand and the sound or irrational motivations of investors. “Herd Instincts” develop because of consensus that certain commodities, assets or financial instruments are rising in value with no proximate reversal in sight. “Irrational exuberance” occurs when investors jump on the bandwagon to pay ever higher prices for stocks, oil, houses, bundled securities and so on believing that rising market value will continue. Winning or losing, with respect to the analogy with gambling, depends on “betting” at the right time to buy or sell under contingent market conditions. Even astute investors cannot factor in unpredictable developments and are therefore subject to placing wrong bets. In general many heed general warnings that markets are becoming overheated; that is, stocks , for example have become overpriced in spite of disappointing company sales and falling demand . A stampede to sell leaves many holding the deflated bag of painful losses and the economy spinning into a downward spiral. The astute investor will take into account such reports along with warnings that companies and investments are over-leveraged -stocks for example have been purchased with too much borrowed money that must be paid back at catastrophic cost if the instrument drops rapidly and/or significantly in value. ( The catastrophe of over-leveraging played out in spades when massive defaults on sub-prime (and regular) mortgages burst the housing bubble).

    We go wrong by focusing on wealth losses suffered in downward movements in the business cycle. Over time, economies NEVER STOP GROWING. Downturns, recessions even depressions never permanently disrupt the upward line on the longitudinal economic growth graph showing strong increases in the output of goods and services; in capital, production, trade or employment. An economy stagnates or shrinks only briefly during the “bad times” then roars back after several months or several years (from the worse depressions) to build high-rise buildings, factories, housing, consumer good cornucopias, sales and trade infrastructure on a global scale at a mushrooming rate. Investment markets are nothing like the “betting” environments of casinos except for the transitory losses suffered by foolish or unfortunate investors and market downturns. Over a lifetime (age 25 to 65) of judicious, largely conservative investing the ordinary person will always win -and most likely wind up a millionaire if he puts a little away monthly in a 401k or its equivalent.

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