Confirmation Bias - Why You Are Your Own Worst Enemy

People who bet on any sport, have something in common, they think they know something about the horse/football/greyhound form that the bookmakers don't, and that the odds are wrong. 

They must think this because the bookmakers are not charities, and they would not knowingly set their odds in our favour. 

The bookies are there to always make money, whoever wins, however you can win at the same time as they do!

Are We Arrogant?

In a way this is verging on a bit arrogant, they think they know better than companies who make large amounts of profit by taking bets on sporting events. 

Sometimes though, it is not the bookmaker that they think they know better than, there are circumstances where a bookmaker will set odds on an outcome that wouldn't get set if only one bet was being taken. 

Sometimes the betting of others, and their reading of the form means that the bookmaker will set odds that don't reflect the probabilities because a number of bets on an outcome have been taken that is disproportionate to the chances of that event happening.

Either way, even if a bookmaker isn't incorrect, those betting feel that his odds are, there is a better chance of an outcome occurring than the odds being offered would suggest.

What We Believe ?

A lot of things have been seen in the past and these things have led bettors to hold a belief. 

This belief can be different from the one we would take if we only knew the odds, in two directions. If it is one way then we might be happy to take these odds and have a bet. If it is different in the other direction then we might use a betting exchange to make a lay bet on the outcome. 

Another thing that all bettors have in common is that we need to be right if we are going to avoid losing, or at least we need to be right often enough if we aren't going to lose money in the long run. In order to do this, we need to be sure that the information we found out that leads us to our conclusions is relevant. 

You May Not Have Seen The Derby Winner On The All Weather !

If a horse wins a group six race at Lingfield by a short head, it doesn't necessarily mean that it is time to start backing the horse to win the Derby. The information that a horse has won a low-class race on an all-weather track is not particularly relevant to the Derby. 

But as well as relevant, the information we use to come to our conclusions also needs to be complete.

If a horse has won three of its last six races, it may be a good horse, but if it refused to run on the other three then we need to take this information into account as well as the three wins. The problem with us as human beings and perhaps especially as bettors is that we are not inclined to do so. 

We can place more importance on information that confirms what we already thought than we do on information that disproves our theories.

This is true in other walks of life as well as gambling. 

Religious people who see a burn mark in their toast that looks like the Virgin Mary take this as a sign that their beliefs are correct, but toast that just looks like toast does not make them question their beliefs. 

The St Leger

Economic journalists are just the same, if they have predicted an economic slump then any signs of this will be taken as proof that they are correct. If they see something that would seem to disprove their theory then this is much more likely to be seen as a temporary blip or an anomaly in the data. 

Politicians are perhaps even worse than anyone else in being selective in which signs of the success of their policy's success they see. A lot of people think that politicians lie, I disagree; I think mostly they believe in what they are saying; they might be wrong but they themselves think that they are right. The problem that we have as gamblers is that we are prone to doing this ourselves. 

We will consistently ignore the things that should dissuade us from our beliefs and we will only take on board the things that make us think that we were correct. If you think that you don't do this then you have probably just given yourself a perfect example of why you are wrong. It is called confirmation bias and it is a form of what psychologists call cognitive bias.

I am certainly guilty of this type of thinking and no more so than in the example at the St Leger held at Doncaster. 

I had seen a horse called Windshear trained by Richard Hannon a few times and its record had impressed me. 

The horse had raced seven times before the St Leger and had always finished in the top two. This seemed impressive to me and I thought that the horse had been unlucky not to win the Gordon Stakes at Goodwood having been caught in a bit of traffic and only missed out by a short head. 

But the fact remained that the horse had never won over a distance greater than 10 furlongs and when Windshear came in fourth in the St. Leger I could have no complaints. I had focussed on the wins and had made excuses where the horse hadn't won.

I was my own worst enemy and as a result, I lost my bet. 

Aldous Huxley and The Doors

Aldous Huxley was a British writer who wrote the short book “The Doors of Perception”, after which the band, “The Doors” were named. 

Huxley wrote many things that are worth reading but his pertinent quote here is “

I think this is something that we should try and remember when betting and sometimes in other areas of life as well. 

Another interesting (if less catchy) quote from Aldous Huxley reads:

“Facts are ventriloquists' dummies. Sitting on a wise man's knee they may be made to utter words of wisdom, elsewhere, they say nothing, or talk nonsense.”