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Fear and loathing in Las Vegas: Evidence from blackjack tables

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Author Info
Bruce I. Carlin
David T. Robinson

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Abstract

This paper uses proprietary data from a blackjack table in Las Vegas to analyze how the expectation of regret affects peoples' decisions during gambles. Even among a group of people who choose to participate in a risk-taking activity, we find strong evidence of an economically significant omission bias: 80\% of the mistakes at the table are caused by playing too conservatively, resulting in substantial monetary losses. This behavior is equally prevalent among large-stakes gamblers and does not change in the face of more complicated strategic decisions.

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Publisher Info
Article provided by Society for Judgment and Decision Making in its journal Judgment and Decision Making.

Volume (Year): 4 (2009)
Issue (Month): 5 (August)
Pages: 385-396
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:jdm:journl:v:4:y:2009:i:5:p:385-396

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Related research
Keywords: blackjack; gambling; omission bias; decision making.;

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References listed on IDEAS
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  1. Larrick, Richard P. & Boles, Terry L., 1995. "Avoiding Regret in Decisions with Feedback: A Negotiation Example," Organizational Behavior and Human Decision Processes, Elsevier, vol. 63(1), pages 87-97, July. [Downloadable!] (restricted)
  2. Zeelenberg, Marcel & Pieters, Rik, 2004. "Consequences of regret aversion in real life: The case of the Dutch postcode lottery," Organizational Behavior and Human Decision Processes, Elsevier, vol. 93(2), pages 155-168, March. [Downloadable!] (restricted)
  3. Simonson, Itamar, 1992. " The Influence of Anticipating Regret and Responsibility on Purchase Decisions," Journal of Consumer Research: An Interdisciplinary Quarterly, University of Chicago Press, vol. 19(1), pages 105-18, June.
  4. Rafael Tenorio & Timothy N. Cason, 2002. "To Spin or Not to Spin? Natural and Laboratory Experiments from "The Price is Right"," Economic Journal, Royal Economic Society, vol. 112(476), pages 170-195, January. [Downloadable!] (restricted)
  5. Erev, Ido & Roth, Alvin E, 1998. "Predicting How People Play Games: Reinforcement Learning in Experimental Games with Unique, Mixed Strategy Equilibria," American Economic Review, American Economic Association, vol. 88(4), pages 848-81, September. [Downloadable!] (restricted)
  6. John Y. Campbell, 2006. "Household Finance," NBER Working Papers 12149, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  7. Loomes, Graham & Sugden, Robert, 1983. "A Rationale for Preference Reversal," American Economic Review, American Economic Association, vol. 73(3), pages 428-32, June. [Downloadable!] (restricted)
  8. Berk, Jonathan B & Hughson, Eric & Vandezande, Kirk, 1996. "The Price Is Right, but Are the Bids? An Investigation of Rational Decision Theory," American Economic Review, American Economic Association, vol. 86(4), pages 954-70, September. [Downloadable!] (restricted)
  9. Loomes, Graham & Sugden, Robert, 1982. "Regret Theory: An Alternative Theory of Rational Choice under Uncertainty," Economic Journal, Royal Economic Society, vol. 92(368), pages 805-24, December. [Downloadable!] (restricted)
  10. Colin Camerer & Teck-Hua Ho, 1999. "Experience-weighted Attraction Learning in Normal Form Games," Econometrica, Econometric Society, vol. 67(4), pages 827-874, July.
  11. Metrick, Andrew, 1995. "A Natural Experiment in "Jeopardy!"," American Economic Review, American Economic Association, vol. 85(1), pages 240-53, March. [Downloadable!] (restricted)
  12. Loomes, Graham & Sugden, Robert, 1987. "Some implications of a more general form of regret theory," Journal of Economic Theory, Elsevier, vol. 41(2), pages 270-287, April. [Downloadable!] (restricted)
  13. Ritov, Ilana & Baron, Jonathan, 1992. " Status-Quo and Omission Biases," Journal of Risk and Uncertainty, Springer, vol. 5(1), pages 49-61, February.
  14. George Loewenstein & Ted O'Donoghue & Matthew Rabin, 2003. "Projection Bias In Predicting Future Utility," The Quarterly Journal of Economics, MIT Press, vol. 118(4), pages 1209-1248, November. [Downloadable!] (restricted)
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  15. Laurent E. Calvet & John Y. Campbell & Paolo Sodini, 2009. "Fight Or Flight? Portfolio Rebalancing by Individual Investors-super-," The Quarterly Journal of Economics, MIT Press, vol. 124(1), pages 301-348, February. [Downloadable!] (restricted)
  16. Thierry Post & Martijn J. van den Assem & Guido Baltussen & Richard H. Thaler, 2008. "Deal or No Deal? Decision Making under Risk in a Large-Payoff Game Show," American Economic Review, American Economic Association, vol. 98(1), pages 38-71, March. [Downloadable!]
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This page was last updated on 2009-11-27.

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