And you thought going on tilt was emotional

http://www.msnbc.com/news/727570.asp


Apparently if you lose in a gamble, your brain is hardwired to make a bigger bet next. Anyone wanna bet that going on tilt is similar - the brain sending a signal to play a riskier hand?

Well, emotions come from the brain, don't they?

The study was total crap. This is part an ongoing debate in academia between psychologists and economists. Economists have built a theory, a metaphor if you will, to model complex human behavior. The thoery is that individuals choose their actions in order to maximize their subjective Utility. A basis of the theory is that humans act Rationally. Rational behavior in the economics model means simply that people exhibit transitive preferences, meaning that if you prefer A over B and B over C, then you must prefer A over C. This is a theoretical construct used to build a model of human behavior and thus testable hypotheses. The funny thing is people do exhibit transitive preferences the vast majority of the time in "real life". Funnier still is that people in insane asylums also exhibit transitive preferences.


Psychologists, because their discipline is composed of an ad hoc collection of unrelated theories to used to explain human behavior, are constantly trying to debunk economics by performing studies that purport to show that people don't act rationally in the subjective sense of the word rational. Since people aren't rational, how on earth can the Economic theory of Utility Maximization be of any use? From a practical and scientific viewpoint it doesn't really matter if the underlying assumptions of the model are "realistic" (it helps if they are though). All that matters at the end of the day is that the theory has explanatory and/or predictive power; and that the theory is efficient. At the micro-economic level at least, the thoery of human behavior put forth by Economics has proven to be very effective. The major complaint about economists is that they can't tell you what the stock market is going to do 5 minutes from now or 5 days from now. But who really can?


" “The assumption of economists has long been that people are pretty rational. It’s not the case. ... After a loss, the brain thinks it’s due for a win.”"


I think its obvious upon reading the article that the authors of the study were just looking for some press converage. Nothing in the study seemed to indicate the Brain had entitlement disease.

Now, I've had a lot of $15.00/hr jobs in my life, and if somebody came up to me at one of them and said "Can I pay you $2 to walk 40 feet and say Hi?," I'd have responded "Can I do it twice a minute for 10 hours?"


But for some reason when I'd be driving home from one of those jobs, and I'd stop at one of those pay-before-you-pump gas stations and give them 30 bucks, I'd stand there praying the pump wouldn't stop at 27.80, and force me to walk up to the counter and get cash.


And for some reason I still like winning the last hand before I stand up from a poker game. Course, over the long run that's probably kept me at the table longer, and made me money. And the first one has probably saved me trips to the gas station - and therefore gas - by giving me an incentive to ram that thing full of $30 if I have to play John Rambo.


eLROY

I just liked the pop-up ad that came with the study. "World's largest online casino!"


The air is thick with electronic irony.

The study as it is presented doesn't do anything to prove whether people act rationally and has nothing to say about why people increse a bet after a loss.


My guess is that most of the points stressed by the reporter were mostly speculation by the researchers. When I was in grad school I saw it happen all the time.

"The major complaint about economists is that they can't tell you what the stock market is going to do 5 minutes from now or 5 days from now. But who really can?"


Economists used to model based on theories and consider differences of theoretical from observed as anamolies. Another perspective, from chaos theory, is that the anamolies are actually normal, and that a quiescent state is atypical.


The stock market exhibits behavior similar to other systems, such as the weather, where very small changes can result in very large changes. Predictions can be made on the basis of probabilities, but the further in time you go out, the more meaningless the predictions become.

Does this mean you're certifiably insane?


I think I could come up with a reasonable explanation to explain away your lack of rationality. It all has to do with your choice of alternative activities at a given location/time juncture. When you are not working your time becomes much more valuable.