Betting psychology: the optimism Bias
The optimism bias
The optimism bias is a widely occurring cognitive bias which causes individuals to believe that they less likely to experience negative events, or that positive events are more likely to happen to them compared to others. In everyday life, you may hear that being an optimist is a good thing, however when betting, your optimistic nature is more of a liability and affect your betting performance negatively.
Optimism does have a very obvious benefit, it just makes you feel good. For as long as you can maintain your optimism, it will be easier to suppress doubt and negative emotions. For that reason, we naturally tend to find information that reinforces our optimistic outlook.
You can see this when you decide to make a bet and write up an analysis for it. Usually you will be looking for arguments that support your bet. But in fact, for a more complete analysis, you should look for counter-arguments with the same vigour. This allows you to judge the merits of the bet as objectively as possible. For these reasons, statistical betting models are significantly better. Models force you to attach objective weight to facts, and establish a consistent relationship between them. Intuition however, often lead bettors to search for more reasons that support the bet, and violate consistency for the sake of finding these reasons. This leads bettors to not place enough weight on reasons that speak against the bet.
Comparison of information
Another important thing to consider when making bets is the comparison of information. Typically, newer and more inexperienced bettors possess knowledge of only a few of the teams in a given sport or competition. This usually tends to be their favourite team, or some teams playing in the same league as their favourite team. The asymmetry of information becomes evident immediately. For instance, while fans are typically quite familiar with the strengths and weaknesses of the team they follow, this is usually never true of the opposing lesser-known team. Alarmingly, this rarely leads to more caution, but rather more optimistic and gut-feeling based predictions. Of course, the overall strengths and weaknesses of one of the teams isn’t irrelevant, but adds very little information about the possible outcomes as you are not able to assess that information in relation to the overall strength of the opposing team.
In sum, to be a better bettor, you should be betting in sports or competitions that you actively follow. This makes your decision making significantly better as you are more aware of the strengths and weaknesses of the teams involved. Also, remember to constantly think about why a team may LOSE a match against the opposition instead of purely focusing on why they will win.