The gambler’s mind is cruel. Sometimes because we have made a profit, we are afraid to put it at risk, even if it presents us with a clear and favorable profit situation, such as when we are at a loss, we are more apt to enter the risk zone again.
We’re not a psychology graduate, so we’re sorry if that sounds silly to you, but for many people their minds tend to sabotage themselves mentally.
To facilitate what we mean, let’s imagine that sports betting are an investment
Imagine Pinnacle Sports has created a lottery on your site and you can win two types of prizes. The first gives you R $ 300 and also the following alternatives: A) 100% chance of winning more R $ 100, or B) 50% chance of winning more R $ 200 and 50% chance of losing R $ 0 (and stay with the $ 300).
The second prize gives you R $ 500 and the following alternatives: A) 100% chance of losing R $ 100, or B) 50% chance of losing R $ 200 and 50% chance of losing R $ 0 (and stay with the $ 500).
The test result
This test was done by the behavioral economist Richard Thaler. In his book “Misbehaving”, which says that in the first test 72% opted for option A and 28% for option B, and that 64% of participants in the second test preferred option number 2.
But the two tests are identical. In the first in option A, the 안전토토사이트 site winner gets a prize of R $ 400, and in the second in option B, they have a 50% chance of keeping R $ 300 and a 50% chance of taking R $ 500. However, because in the first version is option A so clearly superior to B in the test, and in the second test is the situation reversed?
- Richard Thaler explains, “People are risk averse to gains, but they seek risk when it comes to losses.” When we are looking for a favorable situation, we accept less risk and prefer to keep what we have achieved. On the other hand, if we are in a complex situation where there are no obvious answers, it is human behavior to seek more risk in order to try to find the best possible solution. In other words, we are not risk averse, as was believed in classical economics, but loss averse.
This means that a certain loss hurts more than an equivalent size gain. The pain we feel losing $ 100 is greater than happiness when we gain the same value unexpectedly.
This revelation, originally identified by economists Daniel Kahneman (Nobel Prize in Economics 2002) and Amos Tversky, was key to the entire development of behavioral economics. It shows to what extent our behaviors are not cohesive – or, in Thaler’s words, inadequate.
This above can also be coupled with what Kahneman says in his book Think Fast and Slow. Very briefly, he says that we accept a smaller gain if someone with whom we compare has earned even less. The same applies to losses; we accept a loss better if we have comparison with someone who has lost even more.