A study of the University of British Columbia reveals that tipsy gamblers are more likely to spend more money. Of course it’s not surprising that it’s not the wisest use of money if you gamble while being intoxicated. But new evidence reveals that liquid courage sway players to chase their losses.
At the Centre For Gambling Research at the University of British Colombia (UBC) researchers conducted a study that confirms drunk gamblers are more likely to spend more money, or chase losses, compared to their sober counterparts. The center, which is funded by the British Colombia Lottery Corp., completed a study where participants were divided into two groups: one that was given enough vodka to reach a state of mild tipsiness and the other received placebo beverages.
The participants played digital roulette, with significantly worse results for those that had been drinking than those that had placebo cocktails. That makes sense, but under the influence of alcohol, gamblers were more likely to increase their wagers in an effort to earn back losses than the sober players, according to the UBC study.
Alcohol is known to decrease a person’s inhibitions in a variety of circumstances and the UBC study confirms that this is the case in a gaming environment.
The gambler’s misconception is also getting worse
The well-documented gamblers fallacy has ties to drunk gamblers reasoning for chasing losses. The gambler’s fallacy states that a player believes he may be overdue to reach a desired result in a particular game, a form of cognitive preference that ignores the fact that casino games are totally random and each outcome is independent of the last.
For example, a player succumbs to the gambler’s fallacy might see a roulette table that has had five odd numbers on consecutive spins, sit down and place heavy bets on an even being the next spin without acknowledging that the spin he bets on could just as likely be an odd number because it has nothing to do with the prior outcome.
In 2005 a study by the University of California-Berkeley indicated that players can simultaneously fall victim to the gambler’s fallacy and the “hot hand theory,” the latter of which states that positive results attained by the player in succession can continue manifesting themselves.
Reward-Risk assessments
A skewed sense of rewards and risk is one of the reasons drunk gamblers may be compelled to chase their losses. The UBC study ties this to the Prospect Theory. The Prospect Theory, which dates back moren than four decades, was initially employed as an economic model to measure an individual’s pain in losing money and what amount would be required to improve the situation.
Using the theory hypothetical in financial markets, a trader can tolerate a loss of €10,000 if that withdrawal is cleared by, say, a €20,000 winner. In other words, the Prospect Theory is rationalized in a one’s mind by their internal “value function.”
A person’s value function can manifest in different ways, when it comes to chasing losses. First, the gambler may become less sensitive to favorable outcomes, notes UBC. Second, aversion to losing can trump the euphoria of winning in the mind of the gambler, by chasing away from the game. Finally, a gambler’s win and loss reference points can shift over the course of a session, potentially leading to more chasing.
According to UBC chasing may be related to a gambler’s ability to re-reference between consecutive gambles.
