The psychology of betting: An induction for wannabe professional bettors
- Testing the theory of rational choice
- Betting affected by irrationality
- Why do you bet?
Betting psychology will definitely be a familiar term to a sports bettor when he is learning how to profit via sports betting. Can your profit be affected directly by your mind-set? How will a sports bettor avoid the general mistakes? Are you controlling your actions or it is the other way round? Continue reading this article to know more about betting psychology.
We as humans, feel that we are more superior compared to animals because of our ability to be rational in our thoughts. The theory of rational choice founded the economic system. The assumption of the theory is that people will always try to minimise losses and maximise advantage. Theoretically it made absolute sense but is it that widely applicable in practical terms? Continue reading to know further.
Testing the theory of rational choice
In the economics world, preference is when an individual chooses the option that best gives them the most reward or satisfies them the most. For example, Mary who loves fruits, will choose mango over strawberries, and will choose strawberries over apple. Therefore, if given a choice for Mary to choose between apple and mango, she will definitely choose mango instead of choosing apple.
Let us now imagine that Mary participated in her niece’s 6 year old birthday party, the party serves fruits rather than candies as they are more health conscious, and the kids love it. Halfway through the party, Mary was heading to take fruits to eat but only two bowls left. One of them was filled with apples and another one was mango. Before she reaches the mango, two kids want to take the mango before she manages to do so. Therefore, Mary decided to cut the mango into two and taught the kids to share the mango and she took the apple instead.
It would be an assumption that is irrational if we say that we will be doing whatever necessary in order to be profiting from betting.
If we examine the scenario here, Mary could have easily kept the mango for herself given that she is older and have the power to do so and ask the two kids to eat the apple but instead she gave it to the kids. Is her action irrational? Following behaviour scientists, Mary’s satisfaction level of making the two kids happy is higher than satisfying her own taste buds. Hence, she chose the apple, which is “irrational”.
Let us consider another scenario for her. Mary constantly over spends. Even days before her payday, she had been using her overdraft and she is very angry at her spending behaviour. When Mary was heading to the library, she met Gary, who is a good friend of hers and he was enjoying a bowl of fresh apple sprinkled with cinnamon and honey. Gary offered Mary to share his bowl.
Mary is tempted to buy herself mango and ice cream with vanilla flavour but this would be costly to her given her financial state. Therefore, she accepted Gary’s proposal of sharing. However, if this were to happen on her payday, whereby she could afford to indulge in the ice cream of vanilla flavour and the mango she wanted, will your bet be on her choosing Gary’s offer?
One the day of her payday, Mary learns to manage her finances by reading a book. She has decided to ensure she will be disciplined in her finances. She calculated according to her pay, she has a fixed daily budget to spend. She went to buy groceries in the supermarket following the budget. She realised that she had a $2 balance and she went to check the fruits prices. It would cost $2.50 for mango cubes, $2.00 for sliced apple, and $2.00 for strawberries. However, Mary decided to be financially disciplined and bought the strawberries of $2.00 that fits her budget instead of the mango.
Betting affected by irrationality
It is correct for behaviour scientists to say that people generally do not act consistently with rational principles. There are various debates regarding this topic but it is worthy to note that individuals may not always act accordingly to what is necessary to achieve what they want.
In reality, it shows that decisions are based on ambition, goals, timing, financial incentives available alternatives and context. The blind belief of telling yourself you will do accordingly to reach your goal of making money via betting is an assumption that is irrational. In reality, rationality is hardly evident.
Is it reasonable to be betting on over 2.5 goals because the team previously netted four goals during their last outing playing with a strong team and therefore they are most likely to repeat this performance playing with weaker opponents? You will be an availability bias victim if your answer is yes to the aforementioned question.
Do you increase your bets when you are in the middle of a losing streak? Usually people will think that the big win is just around the corner after a losing streak because their misbelief that the probability of winning is higher after suffering a losing streak. Therefore, they will bet big after losing a couple of rounds. This is typical thinking of a gambler, which gamblers should avoid. Cognitive biases are the culprit found by psychologists that cause bettors in losing money.
Therefore, what is the way to avoid these cognitive biases? There is no way to avoid these biases. The only way is to minimize it by sticking to the bettors’ discipline of practicing expected value bets and not making a bet based on assumptions and feelings.
So, what is your reason for betting?
Do you know what your reason for betting is? Is it because of the adrenaline rush? Is it because you enjoy the occasional win’s random reward? Do you regard it as a form of socialising? If you agree to either of the questions above, it means that betting on you is entertainment. Then go ahead to enjoy betting but remember that in any case of entertainment, it is very important to only splurge money on the things you can afford.
However, if you intend to be profiting from betting, make sure that you do not continue betting following your gut feeling or instinct, but follow a strict formula that would give you positive expected value. Probabilities will never be wrong if you follow it long-term. In order to be profiting from betting you need to adhere to it strictly.