
06458029
j
2015e.00817
Lane, Matt
Worth the risk? Modeling irrational gambling behavior.
Math. Enthus. 12, No. 13, 3137 (2015).
2015
Information Age Publishing (IAP), Charlotte, NC; University of Montana, Department of Mathematical Sciences, Missoula, MT
EN
K50
M40
K90
games of chance
mathematical models
expected values
psychology
stochastics
probability theory
statistics
risk
gambling
roulette
luck
utility
probability
http://www.math.umt.edu/tmme/vol12no1thru3/04_Adams.pdf
Summary: In math class, expected value is often used when deciding whether or not a game is worth playing. A common refrain is that games with negative expected value should be avoided. However, nearly all games of chance have a negative expected value, and a simple expected value analysis fails to explain why these games are so popular. In this article, we consider three psychological factors leading to irrational gambling behavior  the illusion of control, hypersensitivity to reward, and beginner's luck  and explore how these factors affect an otherwise purely rational model of gambling behavior.