Topic: Loss Aversion: A Critical Factor for Responsible Gambling. - page 7. (Read 1540 times)

Loss aversion is a cognitive bias in humans that shows that we tend to avoid losses more than we desire profits (twice as much). We avoid the confrontation of feeling that comes with loss, therefore taking more risk to chase losses.

Casinos use this to trap you in a vicious circle of addiction. They will give you loss-back/rake-back in the quantity, which might not have enough appeal for you to withdraw, especially after a big loss (which enabled that loss back). They will do this either by giving you your loss back or rake back in small installments (daily, weekly, or monthly) instead of giving you a lump sum amount one time. It is not that they cannot give you more, but they will deliberately do this because they want you to play with that amount and take bigger risks. After you lose that rake-back/loss-back, you will have an urge (twice as strong) to deposit and win back the lost amount (this is especially true if you are new to gambling), taking a higher risk to avoid the intra-confrontation with the fact that you have just lost x amount. The majority will lose again and again; some will even develop a defense mechanism to not even think about their big losses and continue focusing on depositing more money to cover losses.

This cognitive bias has some deep-rooted genesis in human psychology because of how we evolved. A shortage of food is more lethal than the happiness that comes with excessive food.

I am posting this because understanding this concept helps me become more responsible with my decision-making, and it might be helpful to you as well. I am eager to know opinions of other wise members.

Loss aversion is a cognitive bias in humans that shows that we tend to avoid losses more than we desire profits (twice as much). We avoid the confrontation of feeling that comes with loss, therefore taking more risk to chase losses.

Casinos use this to trap you in a vicious circle of addiction. They will give you loss-back/rake-back in the quantity, which might not have enough appeal for you to withdraw, especially after a big loss (which enabled that loss back). They will do this either by giving you your loss back or rake back in small installments (daily, weekly, or monthly) instead of giving you a lump sum amount one time. It is not that they cannot give you more, but they will deliberately do this because they want you to play with that amount and take bigger risks. After you lose that rake-back/loss-back, you will have an urge (twice as strong) to deposit and win back the lost amount (this is especially true if you are new to gambling), taking a higher risk to avoid the intra-confrontation with the fact that you have just lost x amount. The majority will lose again and again; some will even develop a defense mechanism to not even think about their big losses and continue focusing on depositing more money to cover losses.

This cognitive bias has some deep-rooted genesis in human psychology because of how we evolved. A shortage of food is more lethal than the happiness that comes with excessive food.

I am posting this because understanding this concept helps me become more responsible with my decision-making, and it might be helpful to you as well. I am eager to know opinions of other wise members.

Losing money is painful to almost everyone whether it happens within or outside your pre ascribed bank roll. The question that why people gamble has various answers in psychology (dopamine, adrenaline etc.). Here we are discussing one of the major factors which can lead a fun and entertaining [even money making {poker, sports etc.}]  activity towards an addiction.

Loss aversion is a cognitive bias in humans that shows that we tend to avoid losses more than we desire profits (twice as much). We avoid the confrontation of feeling that comes with loss, therefore taking more risk to chase losses.

Loss aversion is a cognitive bias in humans that shows that we tend to avoid losses more than we desire profits (twice as much). We avoid the confrontation of feeling that comes with loss, therefore taking more risk to chase losses.

This cognitive bias has some deep-rooted genesis in human psychology because of how we evolved. A shortage of food is more lethal than the happiness that comes with excessive food.

I am posting this because understanding this concept helps me become more responsible with my decision-making, and it might be helpful to you as well. I am eager to know opinions of other wise members.

The truth is that while individuals response to loss varies, the majority of people react more to looses that to the instances they win. A win makes it look like winning is a routine that you're used to while looses comes with a burning desire to iether gamble more as a way of recovering the loss.

In general, there's a lot more to chase when you lose stuff compared to when you win stuff anyway. The difference between gaining and losing is massive in terms of attachment after all, since there's something you get to have and something you don't. I guess you can liken it for the idea of taking for granted what you receive (as well as the pain you get after losing those "taken for granted" stuff). Especially in cases where its in the heat of the moment, where gambling falls into.

Not that it can't be prevented though imo. Being aware of it at that moment is pretty much the only thing you'd really need afaik.

We have plenty of cases where people gamble away their rent money or their paycheck for entire month. A brutal one was Father sold his 11 month old baby to fund his gambling addiction.
The premise was that we hate the feeling of loss that is why we tend to chase losses in order to get rid of the feeling. To avoid this inner confrontation we take bigger risk which sometime even threaten the survival. These are impulse based decisions with little thoughts about planned and safe long term future. .

At one point in my playing, I experienced loss aversion. I'm afraid to lose my money more than what I could gain, and there's also a point that I am concentrated on my rewards more than I could possibly lose.

I don't understand this. If losing money is painful for you, why do you continue? Sounds irrational to me.

Start playing in a casino only if you are okay with losing what you have allocated for the game. You shouldn't even start otherwise. Also, I disagree with the notion associated with loss aversion that "the pain of losing $100 is often far greater than the joy gained in finding the same amount". How can you compare pain and joy? They're entirely different experiences.

Oh, this is very brilliant of you

I don't understand this. If losing money is painful for you, why do you continue? Sounds irrational to me.
Start playing in a casino only if you are okay with losing what you have allocated for the game. You shouldn't even start otherwise. Also, I disagree with the notion associated with loss aversion that "the pain of losing $100 is often far greater than the joy gained in finding the same amount". How can you compare pain and joy? They're entirely different experiences.

The man has 300 dollars. He lost $100. According to these scientific studies, should he bet on the last 200 dollars, despite the risk of starving to death? How did it happen that the premise (survival is more important than satiety) led to a consequence (to win at all costs) that contradicts the premise?

Nobel Prize selection committee seems to disagree with you  as the Nobel Prize in Economics was awarded to Daniel Kahneman in 2002 for his work on prospect theory, which popularized the concept of loss aversion: 

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Loss aversion is a cognitive bias in humans that shows that we tend to avoid losses more than we desire profits (twice as much). We avoid the confrontation of feeling that comes with loss, therefore taking more risk to chase losses.
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Loss aversion is a cognitive bias in humans that shows that we tend to avoid losses more than we desire profits (twice as much). We avoid the confrontation of feeling that comes with loss, therefore taking more risk to chase losses.

-snip-

This cognitive bias has some deep-rooted genesis in human psychology because of how we evolved. A shortage of food is more lethal than the happiness that comes with excessive food.

I am posting this because understanding this concept helps me become more responsible with my decision-making, and it might be helpful to you as well. I am eager to know opinions of other wise members.

Loss aversion is a cognitive bias in humans that shows that we tend to avoid losses more than we desire profits (twice as much). We avoid the confrontation of feeling that comes with loss, therefore taking more risk to chase losses.

I am posting this because understanding this concept helps me become more responsible with my decision-making, and it might be helpful to you as well. I am eager to know opinions of other wise members.