If you've had the opportunity to observe gamblers for any length of time closely, you've probably noticed that most of them have inadequate judgment during the game. They exaggerate the chances of winning, quickly forget about failures, underestimate the risks, and believe they can control what happens at the table or slot machines. The reason for this may be a psychological distortion discussed in this article.

What Is Survivorship Bias?

For Casinoz readers who are not familiar with the phenomenon this article is about, let's define the term right away:

Survivorship bias, or survival bias is a cognitive distortion in which people focus on successful examples (so-called "survivors") while ignoring those who are not successful, resulting in a distorted perception of reality.

Details below.

The Term's Origin

The term originated during World War II. Its root is attributed to the American mathematician Abraham Wald, who worked for the Statistical Research Group (SRG) at Columbia University.

The U.S. Air Force faced a problem: how best to armor combat aircraft to improve their survivability. The initial analysis was based on damage studies of aircraft returning from missions.

Wald noticed a fundamental error in this approach. Only "surviving" aircraft were analyzed, that is, those that could return to base. Aircraft shot down during missions were not factored into the analysis. He suggested armoring those parts of the aircraft without damage to the returning machines. His logic was that the lack of damage in those areas on the returned aircraft meant that hits to those areas were critical and prevented the aircraft from returning.


Although Wald did not directly use the term "survivor bias," his work laid the groundwork for formulating the concept. The term became widely used in the postwar years. After the war, the concept of systematic survivor bias was found to be applicable in many other fields, including economics, medicine, sociology, and, of course, the analysis of gambling and financial markets.

Importance of Player Awareness of Survival Bias

This tendency is particularly important in the context of gambling and can significantly influence player behavior. Gambling presents fertile ground for the manifestation of this bias. Players are often confronted with stories of big wins, lucky strategies, and incredible victories. However, these stories represent only a small part of the overall picture, leaving numerous cases of losses and financial losses in the shadows.

The link between the survivorship bias and gambling is evident in the way players perceive their chances of success. By focusing on rare instances of large wins, they may overestimate the likelihood of their success and underestimate the risks associated with gambling.

Awareness of this cognitive error is critical to developing a more realistic view of gambling and making better decisions. In this article, we will look at how survivor bias manifests itself in the world of gambling, what consequences it can have for players, and how you can counteract its influence.

Essence of Survivor Bias

Survival bias is the tendency to focus on people or things that have undergone a selection process, ignoring those who have not. This leads to erroneous conclusions and incorrect assessment of the situation.

Key aspects of this bias:

  • Attention to successful cases: We tend to notice and remember the successful ones while ignoring the many unsuccessful cases.
  • Distortion of statistics: Focusing on successful cases distorts the overall picture, creating the illusion that success is more likely than it actually is.
  • Ignoring context: The factors that led to success or failure are often overlooked.

Examples from other fields:

  • Business: Stories of successful startups often overshadow thousands of failed endeavors.
  • Education: Concentrating on outstanding graduates from prestigious universities can create a false sense of guaranteed success for all students.
  • Health: Focusing on people who have conquered serious illnesses can distort perceptions of the effectiveness of certain treatments.

This error is particularly powerful in the context of gambling. Stories of jackpots and big winnings are widely publicized, while numerous cases of losses remain in the shadows. This creates a distorted view of the likelihood of winning and can encourage people to engage in risky behavior.

Manifestation of Survivor Bias in Gambling

The systematic survivor bias is particularly prominent in the realm of gambling, having a significant impact on player perceptions and behavior. Let's take a look at how this error affects gamblers' perceptions.

  • Overestimating the odds of winning: Players tend to focus on stories of big wins, ignoring the numerous instances of losses. This creates the illusion that the probability of winning is higher than it is.
  • Illusion of control: Successful players often attribute their winnings to skill or strategy rather than luck. This can lead to the false belief that gambling can be "beaten" with the right approach.
  • Motivation to keep playing: Seeing others' success can lead players to believe that their big wins are "about to happen," which encourages them to keep playing even after a series of losses.
  • Underestimating risks: Focusing on positive outcomes can lead players to underestimate the real financial and personal risks associated with gambling.

Survivorship Bias in Various Gambling Activities

Here's how this bias can be displayed in certain games and other types of gambling.

  • Lotteries: Widespread coverage of rare jackpot wins gives the impression that winning is more likely than it is.
  • Poker: Stories of professional players making millions outshine the thousands of players losing money.
  • Gambling machines: The sounds and flashes of wins attract attention, while quiet losses go unnoticed.
  • Sports betting: Successful predictions get more attention than numerous unsuccessful bets.
  • Casinos in general: Showcasing big wins and happy winners creates an atmosphere of success while hiding the real statistics of losses.

For regular visitors to casinos or other gambling establishments, it is critical to learn to exercise good judgment and not succumb to euphoria.


Psychological Mechanisms of Survivor Bias

The systematic survivor bias in gambling is closely related to some psychological mechanisms that explain why people are prone to this error.

Why do people succumb to this cognitive distortion? There are several reasons.

  • Selective attention: People naturally pay more attention to bright, positive outcomes, ignoring less conspicuous negative outcomes.
  • Confirmation bias: A tendency to seek out information that confirms pre-existing beliefs, such as the belief that an easy win is possible.
  • Optimistic distortion: Tendency to overestimate the likelihood of positive events and underestimate the likelihood of negative events.
  • Closeness-to-win effect: The feeling that the player is "close" to winning motivates them to continue playing, ignoring the actual odds.
  • The illusion of control: The belief that one can influence random events, especially after several successful outcomes.

Gamblers are particularly likely to make these mistakes.

Other Cognitive Distortions

There are several other misconceptions associated with survivor error.

  • Gambler fallacy: The belief that random events correct themselves. For example, after a series of losses, a player may believe that a win is "supposed" to happen soon.
  • Dunning-Kruger effect: Overestimating one's gambling skills and abilities due to an inability to assess one's knowledge and skills realistically.
  • Accessibility heuristic: The tendency to estimate the probability of an event based on how easily examples of that event come to mind. Stories about big wins are more visible and remembered better.
  • Planning error: Underestimating the time and money that can be spent on gambling.
  • Halo effect: The tendency to spread the positive qualities of one aspect (e.g., luck in one game) to other aspects or games.
  • Hindsight distortion: The tendency to see past events as more predictable than they were can lead to false confidence in predicting future outcomes.

If you learn to recognize these psychological mechanisms in yourself, you will be more realistic about your gambling behavior.

Implications for Gamblers

Systematic survivor bias can have serious consequences for gamblers, affecting their behavior and financial well-being.

Overestimating Odds of Winning

. Failure to realistically assess the situation leads to dire consequences.

  • Unrealistic expectations: Players may expect more frequent and larger wins than are statistically likely.
  • Increased betting: Belief in a high probability of winning may lead to higher bets and more risky behavior.
  • Ignoring the house edge: Players may underestimate the casino's long-term advantage in games.
  • Continuing to play after losses: The belief that a win is imminent can cause a player to keep playing despite accumulating losses.

All this leads to the development of gambling addiction.

Financial and Personal Risks

The problems can be quite serious and even critical.

  • Financial losses: Overestimating the chances of winning can result in significant financial losses beyond the planned budget.
  • Debt: Seeking to break even or achieve a big win can lead to debt accumulation.
  • Neglect of other aspects of life: Excessive gambling can negatively affect work, relationships, and other areas of life.
  • Development of addiction: The constant pursuit of big winnings can contribute to the development of gambling addiction.
  • Emotional stress: The cycle of hope and disappointment can lead to emotional burnout and stress.
  • Distorted risk perception: Gamblers may begin to perceive high-risk behavior as the norm, which can spread to other areas of life.
  • Social isolation: Excessive gambling addiction can lead to alienation from family and friends.
  • Loss of time: Much time may be spent gambling instead of productive activity or recreation.

Be as careful as possible when gambling.


How to Counteract Survival Bias

The following methods can be used to minimize the impact of systematic survivor bias in gambling.

Theory and Practice

Learn the theory of gambling and develop practical skills.

  • Study probability: Understand the realistic odds of winning in various gambling games.
  • Familiarity with systematic survivorship bias: Knowing this cognitive distortion will help you recognize it.
  • Critical thinking: Developing skills in analyzing information and statistics related to gambling.
  • Studying the stories of losers: Intentionally seeking information about the negative effects of gambling to balance perspective.
  • Understanding the house edge: Realizing that the casino always has an advantage in the long run.

The more knowledge, the greater the likelihood of success.

Practical Tips for Players

Here are some helpful tips for gamblers on how to avoid succumbing to this cognitive distortion.

  • Setting limits: Define clear financial and time limits before you start playing.
  • Record keeping: Capturing all wins and losses for an objective assessment of results.
  • Use timers: Set reminders to monitor the time spent playing.
  • Regular breaks: Schedule breaks to reassess the situation and emotional state.
  • Diversifying interests: Developing other hobbies and activities besides gambling.
  • Social support: Discussing gambling with friends or family to get objective feedback.
  • Use of self-exclusion tools: Many online casinos offer the option of voluntary self-exclusion.
  • Professional help: Seek professional help when signs of addiction develop.
  • Practicing mindfulness: Developing meditation and mindfulness skills for better impulse control.
  • Motivational analysis: Regularly reassessing the reasons for gambling participation.

This should help minimize the negative consequences of a survivorship bias.

Role of Gambling Industry

The gambling industry can both exacerbate and mitigate this problem.

  • Marketing strategies: Many advertising campaigns focus on big wins, which may reinforce systematic survivor bias.
  • Transparency: The question of how openly casinos and bookmakers should report actual odds of winning.
  • Social responsibility: The balance between profit and protecting vulnerable players.
  • Game design: Some elements of games (e.g., "near-wins" in slots) can reinforce cognitive distortions.

Disciplined operators should implement responsible gambling measures.

  • Information: Providing clear information about the chances of winning and the risks of gambling.
  • Self-control tools: Introducing features to set limits on deposits, bets, and playing time.
  • Educational programs: Develop and promote educational materials on responsible gambling.
  • Self-Exclusion System: Enabling players to limit their access to gambling voluntarily.
  • Staff training: Training casino staff to identify and support problem players.
  • Collaboration with support organizations: Partnering with support groups and rehabilitation centers.
  • Regular research: Conducting and funding research on the impact of gambling on society.

Conclusion

Systemic survivor bias is a serious problem in the context of gambling, distorting player perceptions and potentially leading to negative consequences. Critical thinking, awareness, and a responsible approach by both players and the gambling industry are key factors in overcoming the negative consequences of survival bias in gambling.

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