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Fear and Loathing in Las Vegas: Evidence from Blackjack Tables

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  • Bruce Ian Carlin
  • David T. Robinson

Abstract

Psychologists study regret primarily by measuring subjects' attitudes in laboratory experiments. This does not shed light on how expected regret affects economic actions in market settings. To address this, we use proprietary data from a blackjack table in Las Vegas to analyze how expected 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: players incur substantial losses by playing too conservatively. This behavior is prevalent even among large stakes gamblers, and becomes more severe following previous aggressive play, suggesting a rebound effect after aggressive play.

Suggested Citation

  • Bruce Ian Carlin & David T. Robinson, 2009. "Fear and Loathing in Las Vegas: Evidence from Blackjack Tables," NBER Working Papers 14955, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:14955
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    Cited by:

    1. Ruty Keinan & Yoella Bereby-Meyer, 2012. ""Leaving it to chance"-Passive risk taking in everyday life," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 7(6), pages 705-715, November.

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    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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