Useful Advice on how to Exclude Hindsight Bias from Your Betting

Neuroeconomics studies dealing with decision-making procedures have proved that the activity aimed at earning an income influences human brains in the same way as drug intoxication, while financial losses are evaluated as deadly dangers. So, gamblers must find a method to increase winning chances balancing between euphoria and dangers.

The main way to guarantee a long-term betting income is to apply a gambling strategy, consider positive expectations, and regularly deal with betting. It sounds simple, but numerous difficulties can arise because we think a lot.

General Principles of Cognitive Distortions

1972 witnessed an exploration of cognitive distortions i.e. systematic mistakes leading to the fact that people make false conclusions. The psychologists found a lot of such distortions. Looking down, we overestimate a height; that is why we feel fear of falling.

Unfortunately, mental tips also known as “heuristic methods” can not significantly help in the situations when objectivity plays a crucial role (for example, it refers to placing wagers).

The cognitive distortions that can be caused by such aspects as uncontrolled train of thoughts, impact of social environment, emotional motivation, and mistaken information analysis will inevitably influence a decision-making procedure when you are placing sports wagers. Such apprehensions easily appear in brains, but they result in serious systematic mistakes.

Hindsight Bias in Betting Explained

Hindsight bias is one of the most widespread cognitive distortions. It was developed by Thomas Gilovich who was the first psychologist to explore its effect in the gambling industry. In the course of an experiment to determine the reasons according to which American punters could not effectively use betting strategies, Gilovich found that gamblers` opinions concerning their own successes and losses influenced their following bets.

The first experiment shown that neither winners nor losers had changed their bets after football matches, outcomes of whose were determined by an accident (for instance, mistakes of referee). Here, losers justified their misfortunes by various external factors, while winners neglected them paying attention to the result only. However, Gilovich came to conclusion that bettors usually considered any success as a prescription, while losses made them carefully analyze reasons of that result.

In the second experiment, Gilovich tried to explore how previous mistakes caused by accidental reasons could influence the punters` future gambling. For this, he told experimental subjects that an accidental factor had greatly influenced an outcome of a previous game. It was found then that losers tended to again believe in their favorite teams. With this, winners also did not give up on their favorites.

In his concluding experiment, Gilovich found that both the winners and the losers significantly increased the amount of future stakes in comparison with the initial amount of money placed. It is interesting that it was equally recorded among bettors who both had lost and won because of an accident.

In such a manner, one can make a conclusion that a success perception as a prescription as well as an opinion that a loss appeared only because of an accident can lead to bettors` overconfidence in their own gambling skills and decreased chances to obtain any profits in the future. Gamblers and many other people under different conditions are not ready to recognize that they can be in error.

Lessons Learnt

Considering everything mentioned above, it is reasonable that numerous bettors try to find a way to overcome the hindsight bias and the other cognitive distortions. Some experts believe that it is impossible because people are naturally subject to the cognitive distortions, and people can not do anything with this. Other scientists, however, state that weaknesses can not harm any more if people know about them.

Thus, when you find yourself thinking on probable victory, it can be the moment when your judgments are subject to influence of the cognitive distortions. So, instead of curse your fortune, it would be better to find the most important thing in your betting. Is it more important to be right or to obtain benefits? A simple answer can be rather profitable for future gambling.