How do we make decisions quickly when placing bets in a casino?

How do we make decisions quickly when placing bets in a casino?

Like many tourists, Rebecca and Catherine always wanted to visit Las Vegas. They took in the dazzling sights of the bright lights, enjoyed the stage magic and drifted into one of large casinos. When they walked into the casino they were amazed by the sounds and lights. Catherine had always enjoyed the game of roulette so headed straight to the roulette table. Catherine placed three consecutive bets, losing all three. Watching this Rebecca quietly said to Catherine “Maybe you should try another game, the odds are against you winning.” To this Catherine replied “No, I have lost three times I am overdue a win, I will win soon.”

When we make decisions, we like to think that we make all of our decisions rationally. Casino environments are designed to be one of the most complex environments that we ever encounter, there are colourful, flashing lights, loud machines playing music and people cheering. It is hard to deal with the environment, tune-out and make clear decisions. To deal with complex environments the brain has developed a number of judgement heuristics. Judgement heuristics are mental short cuts that enable us to make quick decisions whilst ignoring part of the decision-making environment. One classic example of a judgement heuristic was given by Catherine above when speaking to Rebecca at the roulette table. The aptly named gambler’s fallacy, as demonstrated above can also be seen in the following classic scenario. Imagine that someone is flipping a coin multiple times, the coin lands head side up three times in a row. Someone watching the coin flipping is asked to guess whether the next coin will land head side up or tail side up. If the person guesses tail side up they are using the gambler’s fallacy, a belief that randomness follows a pattern. Many people believe that for the coin flipping to be truly random the outcome of a sequence of five coin flips must be something like HEADS-TAILS-HEADS-TAILS-HEADS. If an outcome of five flips is HEADS-HEADS-HEADS-HEADS-HEADS then the coin is overdue to land with the tail side up otherwise this is not random. The belief in a pattern of randomness persists in most areas of life.

post 5 image 1.png

In a field study by researchers at the University of Navada 18 hours worth of overhead security camera footage of a roulette table was obtained from a large Reno casino, consisting for 904 bets (Sundali & Croson, 2006). The researchers watched all of the bets and coded the patterns of betting for every gambler that sat down at the table. On an American-style roulette table there are 36 different sections of the roulette wheel, coloured as red or black (European-style roulette has 37 sections). Players can bet on more than one number and colour by placing their chips on the corners or side of each of the numbered squares. If a gambler bets randomly then after the researchers coded each bet there should be a 2.6% chance that a bet would fall on each number. The researchers found that after an outcome of RED-RED-RED gamblers responded with a gambler’s fallacy type logic by betting on BLACK. Like Catherine above and the coin flipping above, the gamblers believed in a representation, or pattern of randomness.

A study by Gal and Baron in 1996 investigated the gambler’s fallacy in a laboratory-based experiment. Gal and Baron examined whether a change in betting strategy was due to boredom by asking participants why they choose to bet in the way that they did. Most of the participants in the Gal and Baron study responded by saying that they were attempting to maximize their earnings by using the gambler’s fallacy-type logic. It would appear that the gambler’s fallacy is not simply caused by boredom.

post 5 image 2.png

Besides gambling at the roulette table other casino games in which heuristics play a major role include the craps table and fruit machines. One prominent heuristic at the craps table is the belief in illusory correlations. When rolling the dice at the craps table gamblers often blow on the dice for luck or roll the dice softly in the belief that a low number will come up, and roll the dice harder when they want a higher number (Griffths. 1994). These gamblers believe that if a number comes up that they did not want then they did not through the dice hard or soft enough.

Cognitive short cuts as heuristics are used in every area of life where decisions need to be made. With respect to gambling, heuristics have been documented in fruit machine users, and at the poker, blackjack, roulette and craps tables. Even when betting on horse or dog races gamblers reliably use these mental short cuts (Terrell, 1998). I have highlighted two of uses of heuristics above, namely the gambler’s fallacy and illusory control. Like Catherine above many people fall for these heuristics and make sub-optimal decisions based on incorrect beliefs. When it comes to gambling, there are two ways to avoid these cognitive traps. If gambling alone take your time to think about the decisions that you want to make. When gambling in a group of with a friend you could listen to the advice of your friend as Catherine should have above.

Heuristics in food choice, how do we choose what to eat and how much to eat?

Heuristics in food choice, how do we choose what to eat and how much to eat?

Ian and Jill were on their lunch break from a long and busy day at work. They both worked in the same office and liked to get out of the office environment for an hour to eat their lunch. Just like on any other day Ian and Jill walked from their office down the street to the local food court. Neither Ian nor Jill were picky eaters they’d just eat whatever they felt like eating. As they got to the food court they both looked around at the large number of restaurants and cafes that they could choose from to purchase lunch. Jill looked at Ian and said “Well, where should we eat today? There are so many choices here.”

In many countries, we live in very food-rich environments. In supermarkets, we can choose from thousands of different items of food, and from this we can combine these food items into tens of thousands of different dishes, albeit with a little help from our recipe books. When we go out to eat like Ian and Jill we encounter vast numbers of dishes to choose from. Most consumers are not aware of it but on a day-to-day basis we make an estimated 200 food choices (Wansink & Sobal, 2007). Of course, we don’t like to agonise of what to eat for lunch so we like to use simple effortless strategies. The lack of any deliberation leaves us susceptible to ‘rules-of-thumb’ (mental shortcuts known as heuristics).

Post 4 image 1.png

So, what heuristics are involved in food choice?

When stood at the doors of the food court looking at the dozen or so restaurants ahead of us many us like to consider one attribute of food to be the most important (e.g., low in calories, inexpensive, convenient etc.). A heuristic known as the lexicographic decision rule, LEX for short, accounts for this by saying that we make our decision based on the food that satisfies an attribute the most (e.g., the food alternative with the lowest number of calories). If two foods are equal on the first attribute the second most important attribute of the food acts as the tie-breaker (e.g., convenience and inexpensive).

Academics at the Max Planck Institute in Berlin have investigated the lexicographic decision rule in food choice (Schiebehenne et al., 2007). In 2006 the researchers conducted a study at the Potsdamer Platz Arkaden, a large shopping centre in Berlin. They had students rate food along 38 different attributes (e.g., price etc.). The researchers then used the information from the students in a study were participants were shown 10 photographs of food dishes with the name of a restaurant, the price and type of food (e.g., Indian or Italian food). Participants choose a food and rated their choice on the 38 attributes. Example foods from this study include Big Mac burgers, Bockwurst with potato salad, chocolate muffins, lasagne, sushi and pizza. The results of the study found that participants did mainly consider only one attribute when making their decision about which food to eat. When tied on the single attribute with another food they simply considered the second most important attribute (is this low-calorie food as inexpensive as the second low-calorie food?). The lexicographic decision rule was able to predict the food choice that participants in this study made after considering what single attribute was of the most importance to a participant.

Post 4 image 2.png

Another strategy for food choice that many people use is evident in people who keep to strict diets for religious reasons or health reasons. Experienced dieters often practice rules that become habitual, for example, avoid all chocolate. When practiced frequently dietary rules become internalized and can be used as rules-of-thumb, however, this lack of conscious deliberation can leave us susceptible to other cognitive processes, even when trying to avoid sugary chocolate. The size of plates and serving utensils are just one of the things have been shown to influence how much we eat when serving our own food. People tend to serve themselves more, and eat more from larger bowls and plates than when given smaller plates, even when given the option to return for a second serving had they received a small plate (Gier et al., 2006). As for beverages, when given a tall drinking glass people pour more than when they have a short glass (Wansink & Van Ittersum, 2003).

For most of us who do not follow a particular diet and like to try different foods the lexicographic decision rule can be a great decision aid because when using this we don’t have to consider a lot different competing attributes of a food dish. In the case of Ian and Jill walking into the food court satisfying their joint desire to eat healthy the lexicographic decision rule works well to help them avoid the many fast food outlets. However, for those who are aiming to avoid chocolate (or any other single food) we should be aware of the other cognitive processes at work, after all a large plate does not mean that we all have to fill the plate completely.

Dan Edgcumbe