So it’s Saturday and tonight I’m going to watch Ricky Burns World Lightweight boxing champion defend his title at Braehead Arena in Glasgow.
I imagine that most of the spectators tonight will no doubt place some sort of bet on the fight, either with their friends or with a bookmaker. Begs the question do we really become more confident after placing a bet?
In 1968 two Canadian psychologists named Robert Knox and James Inkster surveyed 141 punters at a race track. 72 of those punters had just placed a small bet within the past 30 seconds and the other 69 people were about to place a bet in the next 30 seconds. Knox and Inkster hypothesised that the punters who had actually committed themselves to placing a bet would believe more strongly that they had picked a winning horse.
Knox and Inkster asked each of the 141 punters to rate their horse’s chances of winning on a scale of 1 to 7. They found that the people who had not yet placed a bet rated their chances as fair, an average of 3.48, whereas the punters who had just placed a bet rated their chances as good, 4.81.
The experiment had been repeated several times and it became clear that both Knox and Inkster’s hypothesis was right; there is evidence of overly optimistic probability bias, i.e. people do become more confident after they place a bet.
So what changes?
Now as we already know, the odds the horse will win don’t actually change, the only thing that does change is in the mind of the punter. So why is this?
Well the reason for the dramatic change lies with the same pattern I briefly discussed yesterday, Commitment and Consistency. People convince themselves that the choice they make is the right one and the pressure of wanting to remain consistent with the choice causes us to react in a way that justifies our earlier decision.
Remaining consistent with a decision is not always necessarily a bad thing; after all, consistency is a powerful tool in guiding our behaviour and is a valued character trait as it demonstrates stability, honesty and is the basis of logic. People who are viewed as inconsistent are generally thought to be undesirable and often they may seem confused, difficult and undisciplined.
Consistency and Exploitation
In the coming articles I’ll discuss how you can defend yourself against commitment and consistency.
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