Psychology of Betting – Chimp Paradox and Confirmation Bias

Meeting a professional punter for the first time is a disappointing experience for most people. Expectations of cigar-smoking braggarts, living a hedonistic life, using supernatural powers of prescience to take large sums of money off angry bookmakers, are soon shattered. The average professional punter is a different character altogether.

Chimp Paradox and Confirmation Bias

 

I became a profitable punter soon after meeting a professional punter for the first time.

The company I had recently joined asked me to visit him at home. He lived in a run-down, one-bedroom apartment on the outskirts of a Northern English city-in-decline. On one wall was an old kitchen table with a ramshackle assortment of computer screens.  It looked like the technology suite of a foreign exchange trader post-earthquake. On the other wall were shelves full of a sets of a popular construction toy. All labelled and numbered. None of the boxes open.

He didn’t shake my hand. He didn’t say hello. He told me he had Asperger’s and didn’t like talking to people. He didn’t seem to care if I minded.

Working to solve his problem over the course of a morning was revelatory. His methods weren’t significantly different to others I was aware of and was developing myself, but his unique psychological disposition – borne out of his developmental disorder – made me realise that being a profitable punter is as much about attitude as it is about aptitude.

I have met and worked with dozens of professional punters in the intervening years and, whilst none have ever been quite so extreme as the first, they all share an ability to eradicate impulse and emotion from their punting, remaining steadfastly rational.

This is a difficult thing for the average person to do, because we are hard-wired – especially in stressful situations – to act emotionally.  Dr Steve Peters, the elite-sport psychiatrist who became well-known through his work with the British Cycling Team, describes this in his book, The Chimp Paradox.

We all have a human brain that can calculate things rationally, but we are all-too-often swept away by our chimp brain, which jumps to conclusions based on established patterns of thought that we believe to be correct, but which might not be.

Living in a prehistoric jungle, a chimp brain is very useful. Hearing a loud noise probably means something bad is about to happen. Running away from it, or swinging your fist at whatever is making the noise, is probably the best bet for survival. In modern society, though, those kinds of behaviours get you into trouble.

These hard-wired behaviours are being repeatedly established in a burgeoning area of psychology: the study of cognitive bias.  In a series of articles, I will look at how understanding these innate biases can help punters change their approach to punting to make it more profitable.

An example of cognitive bias that it is crucial for punters to be aware of their confirmation bias. Although a suspected trait of human beings for a long time, it was first codified by Peter Watson, a cognitive psychologist working at University College London in the 1960s. He found that subjects, having predicted the relationship between a series of three numbers, would irrationally hold to their prediction despite mounting evidence that other explanations were just as likely.

Repeated studies, including more recent ones using brain scanners, have firmly established this human characteristic to gather information selectively to support a pre-existing belief.

This bias can be destructive when it comes to punting.

Imagine two punters watching Horse Racing. After cursory form study, one decides that Horse A will win an upcoming race and backs it accordingly. Later, it’s odds begin to shorten. The punter says that this is because the horse’s connections are backing it: a good sign. The punter notices a jockey change; a young apprentice is now on board.

This is a good sign, too: the trainer wants better odds and is trying to throw punters off the scent. The horse is sweating in the paddock and is behaving skittishly. More good news: the horse is clearly primed for this race and ready-to-go. The horse breaks badly and trails the feed. How much better can this get? Connections are clearly trying a change of tactics.

At any point in the narrative, the punter could have laid the horse and locked in a profit. However, every new bit of information that was available, rather than being rationally assessed, was used to confirm the punter’s original choice. Objectively, whilst those interpretations were not necessarily wrong, other interpretations – such as a popular tipster had recommended backing the horse; the original jockey was injured; the horse had become anxious its surroundings; and jockey error caused the horse to start slowly – were equally plausible.

In these situations, though, humans – it seems – are hard-wired to ignore alternative explanations, and it’s especially difficult in situations like the one above, where we have shared our prediction with someone else. Admitting that our original prediction is looking less likely means losing face.

Confirmation bias might be useful to us as human beings. Maybe it explains our ability to persist at tasks; to pursue a goal with a single-minded focus. When it comes to betting, however, it’s a predilection that must be overcome if you want to be profitable.

 

About The Author – Jack Houghton 

As a passionate sports’ fan and punter, Jack has written about sports and betting for over a decade, winning the Martin Wills Award for racing journalism in 2002 and writing Winning on Betfair for Dummies, first published in 2006 and now in its second edition, having sold over 35,000 copies in two languages.

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