Reckless betting, losing caused by gamblers' winning streaks

October 22, 2010 By Susan Guibert

"Know when to hold 'em and know when to fold 'em" is an adage that doesn't seem to apply to gamblers who are winning big, according to research conducted at the University of Notre Dame.

Using 179 subjects, Anita Kelly, professor of , conducted two experiments in which she set up a tournament on the computer using real prize money. Players started with a stack of chips on the computer screen and placed bets with the chips predicting whether or not the next card they would be dealt would fall between the first two cards.

“The catch was that in both experiments, we rigged the first tournament. Half the players, chosen at random, won 80 percent of the hands they played, and half the players lost 80 percent,” Kelly says.

So the question at that point, according to Kelly, was, “How well would the players who had just won, as compared with those who had just lost, play in a new tournament that was not rigged?”

After the first tournament was over, all the players were given a second chance to win with a fresh stack of chips. They were told that their first tournament had no bearing on whether they would win the prize money. This time, researchers did not rig the tournament — the cards were dealt randomly.

“It turns out that the who were in the condition in which they had won 80 percent of their hands, as compared to those who had just lost 80 percent of their hands, ended up betting significantly more poorly and recklessly. We got the same results across both experiments,” says Kelly.

In the second experiment, researchers also included a measure of their positive and negative emotions after the first tournament, which showed that feeling good after the first tournament was associated with betting more recklessly in the second .

“Like individual investors who expect stocks that have recently risen in price to continue to gain in value, people who had just won many bets would wager too much on hands that were likely to lose,” Kelly says.

More information: Author of the books “The Psychology of Secrets” and “The Clever Student: A Guide to Getting the Most from your Professors”, Kelly’s areas of expertise include secrets and confidentiality. She also blogs regularly for "Psychology Today magazine.

Related Stories

Recommended for you

Before assigning responsibility, our minds simulate alternative outcomes, study shows

October 17, 2017
How do people assign a cause to events they witness? Some philosophers have suggested that people determine responsibility for a particular outcome by imagining what would have happened if a suspected cause had not intervened.

Schizophrenia disrupts the brain's entire communication system, researchers say

October 17, 2017
Some 40 years since CT scans first revealed abnormalities in the brains of schizophrenia patients, international scientists say the disorder is a systemic disruption to the brain's entire communication system.

For older adults, volunteering could improve brain function

October 17, 2017
Older adults worried about losing their cognitive functions could consider volunteering as a potential boost, according to a University of Missouri researcher. While volunteering and its associations with physical health ...

Magic mushrooms may 'reset' the brains of depressed patients

October 13, 2017
Patients taking psilocybin to treat depression show reduced symptoms weeks after treatment following a 'reset' of their brain activity.

Living near a forest keeps your amygdala healthier

October 13, 2017
A study conducted at the Max Planck Institute for Human Development has investigated the relationship between the availability of nature near city dwellers' homes and their brain health. Its findings are relevant for urban ...

Scientists researching drugs that could improve brain function in people with schizophrenia

October 12, 2017
Virginia Commonwealth University researchers are testing if drugs known as HDAC inhibitors improve cognition in patients with schizophrenia who have been treated with the antipsychotic drug clozapine.

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.