Bad Bets Research Articles

How We Lost 90% of Participants on a Bad Bet: Results from a Pilot Randomized Controlled Trial on Cognitive Bias Modification in Problem Gamblers.

Whilst opportunities to participate in gambling have increased, access to support for problem gamblers is lacking behind. This lack of balance calls for improved and accessible intervention methods. The present double-blind randomized controlled trial (RCT) explored the effectiveness of two interventions targeting automatic cognitive processes, known as Attentional Bias Modification (AtBM) and Approach Bias Modification (ApBM). It was hypothesized these interventions would reduce gambling behavior and reduce or reverse targeted biases. Participants (N = 331) were community-recruited Flemish (35%) and Dutch (65%) adult problem gamblers motivated to reduce or stop their gambling who received either six sessions of active training (AtBM or ApBM) or of the corresponding sham-training (sham-AtBM or sham-ApBM). Due to high attrition rates (90.1% up to the intervention phase) the study was terminated before completion, since it would greatly limit the validity of any results. A post hoc qualitative study was performed on a subset of participants to gain insight into contributing factors for the high attrition rate. Issues negatively impacting participants' motivation to complete the program were identified, as well as elements of the program that received approval. The results from this study provide a first insight into the potential of the use of online cognitive bias modification (CBM) interventions in problem gambling (PG). Suggestions and directions for future studies are discussed.

A bad bet for sports fans: the case for ending the “gamblification” of sport

ABSTRACT A “gamblification” of sport has occurred over the last 25 years. Sports betting operators are now major sponsors of sport, and gambling activities and cultures are firmly embedded into sport. This paper considers the key issues affecting harmful gambling amongst sport audiences arising from this gamblification and implications for sport management. A narrative literature review identifies seven key issues: 1) harmful sports betting and negative consequences, 2) increased access to sports betting through smartphones, 3) innovated betting options that appeal most to bettors already experiencing gambling harm, 4) how advertising exacerbates harmful betting, 5) the normalisation of sports betting amongst sports fans, 6) impacts on children and adolescents, and 7) the heightened risk of harmful betting amongst sports participants. Sports organisations play an instrumental role in the gamblification of sport and derive revenues from wagering operators that are, in large part, derived from harmful gambling by sports fans. Rising community backlash against the normalisation of sports betting, and increasing regulatory restrictions on sports betting sponsorship and advertising, suggest that gambling sponsorship of sports will increasingly become untenable. Sports organisations need to plan for a future without wagering sponsorships and use their considerable influence to reduce gambling harm amongst their fans, players and broader communities.

The Long Crisis: New York City and the Path to Neoliberalism

The Long Crisis: New York City and the Path to Neoliberalism

Slow Momentum with Fast Reversion: A Trading Strategy Using Deep Learning and Changepoint Detection

Momentum strategies are an important part of alternative investments and are at the heart of the work of commodity trading advisors. These strategies have, however, been found to have difficulties adjusting to rapid changes in market conditions, such as during the 2020 market crash. In particular, immediately after momentum turning points, when a trend reverses from an uptrend (downtrend) to a downtrend (uptrend), time-series momentum strategies are prone to making bad bets. To improve the responsiveness to regime change, the authors introduce a novel approach, in which they insert an online changepoint detection (CPD) module into a deep momentum network pipeline, which uses a long short-term memory deep-learning architecture to simultaneously learn both trend estimation and position sizing. Furthermore, their model is able to optimize the way in which it balances (1) a slow momentum strategy that exploits persisting trends but does not overreact to localized price moves and (2) a fast mean-reversion strategy regime by quickly flipping its position and then swapping back again to exploit localized price moves. The CPD module outputs a changepoint location and severity score, allowing the model to learn to respond to varying degrees of disequilibrium, or smaller and more localized changepoints, in a data-driven manner. The authors back test their model over the period 1995–2020, and the addition of the CPD module leads to a 33% improvement in the Sharpe ratio. The module is especially beneficial in periods of significant nonstationarity; in particular, over the most recent years tested (2015–2020), the performance boost is approximately 66%. This is especially interesting because traditional momentum strategies underperformed in this period.

Data Breaches and Potemkin Privacy: How FTC Regulation Can Restore Authority and Agency to Online Users and Destroy the Data Oligarchy

Data Breaches and Potemkin Privacy: How FTC Regulation Can Restore Authority and Agency to Online Users and Destroy the Data Oligarchy

Overconfidence

PurposeThere has been significant growth in entrepreneurship research over the past several decades. Yet with all of the knowledge gained and presumably improved training of would-be entrepreneurs, firm failure rates remain persistently high. It is argued here that the historical and continued research focus on successful entrepreneurs has limited the field. Entrepreneurs are often considered to possess uniquely positive capabilities relative to the general population; this paper explores the possibility that the majority of entrepreneurs suffer from overconfidence and that this leads most entrepreneurs to make “bad bets” that result in underperformance and firm failure.Design/methodology/approachIn this paper, a qualitative review of the literature was performed.FindingsBased on the literature review, three formal propositions are developed. The first two suggest that the majority of entrepreneurs are overconfident in their personal capabilities and the prospects for their new ventures. It is then proposed that this overconfidence leads to errors in judgment that results in financial underperformance and failure found among most new ventures.Originality/valueThis paper makes an important contribution to the entrepreneurship literature by arguing that overconfidence negatively impacts pre-founding decision-making such that entrepreneurs pursue flawed opportunities. Studying the issues raised in this paper may spur new lines of research and knowledge that lead to better entrepreneurial outcomes.

Good Bets, Bad Bets and Dark Horses: Allied Intelligence Officers’ Encounters with German Civilians, 1944–1945

AbstractThis article explores Allied intelligence officers’ encounters with and interrogations of German civilians from autumn 1944 onwards, psychological warfare operations directed at civilians, and their wider ramifications. Focusing especially on the officers serving with the Psychological Warfare Division (PWD), I will demonstrate that field intelligence officers’ stance towards German civilians was fluid and often ambiguous, with the encounter causing considerable distress to some of them. Their reports and correspondence further suggest that in this period, Germans readily professed knowledge of atrocities. But contrary to intelligence officers’ expectations, they failed to accept any guilt or responsibility. Finally, I will argue that the very foundations and techniques of Western Allied psychological warfare may have reinforced and legitimised justification strategies that separated between “real” Nazis and everyone else. This was at odds with one of the central aims of Military Government, i.e. to inculcate a sense of culpability in Germans.

Bad bets: Nonlinear incentives, risk, and performance

AbstractResearch SummaryThis article examines the consequences of incentive slope and shape on performance and risk‐taking. It focuses on how slope—incentive intensity—influences risk‐taking, and how shape—nonlinearity—influences performance. We use quasi‐random variation in the context of the hedge‐fund industry to separate slope and shape effects. Our results demonstrate that shape has large and important effects on performance, and that slope affects risk‐taking. The evidence suggests that poor performance in the industry is often due to bad bets—excessive risk‐taking that reduces performance—taken in response to nonlinear incentives. The findings suggest that, although nonlinear incentives are widely used, they can, under certain circumstances, predictably produce pernicious effects on organizational performance.Managerial SummaryThis article examines how nonlinear incentive contracts—such as contracts that reward performance above a threshold substantially more than below it—influence managerial behavior. Using the hedge‐fund industry, in which nonlinear incentives are ubiquitous, as a laboratory, we find that nonlinear incentive schemes cause managers who are “close” to, but below, the performance threshold to take bad bets—excessive risk‐taking that reduces performance. The findings suggest that, although nonlinear incentives are widely used, they can, under certain circumstances, predictably produce pernicious effects on organizational performance.

'An Analysis of Tesla’s Business Ventures in the Energy Field'

This paper involves discussing Tesla’s business model through analyzing both its effective as well as ineffective business ventures. With regards to the positive aspects, Tesla has been an effective leader in the electric vehicle market. In addition, Tesla has had initial success in investing in solar energy through its acquisition of solar energy company SolarCity. (Merced, Michael, “Tesla and SolarCity Shareholders Approve Merger,” New York Times, November 17, 2016) However, while this acquisition was initially successful, overall SolarCity has proven to be economically ineffective. (Muoio, Danielle, “Elon Musk has a brilliant plan to change your roof,” Business Insider, November 6, 2016, “Two Years In, Tesla’s SolarCity Deal Looks Increasingly Like A Bad Bet, Forbes, September 25, 2018”) Ultimately, Tesla’s investing in the electric vehicle market has been more successful than the company’s investing in the solar energy field, due to SolarCity not being efficient for Tesla. (“Two Years In, Tesla’s SolarCity Deal Looks Increasingly Like A Bad Bet”) Finally, I will also discuss ways for how Tesla can improve financially.

Arjun Appadurai, Banking on Words

In David Cronenberg’s movie adaptation of Don De Lillo’s novella Cosmopolis, Eric Packer, a young billionaire prince of Wall Street, stands to lose his empire following a bad bet on currencies. Amid looming financial ruin and signs of social unrest, he inches across Manhattan in his white stretch limousine on a whimsical mission to get a haircut. A constant flow of financial figures reflects on his alabaster face, passing by as inconsequentially as do the tumultuous events unfolding outside t...

Interactions among attention-deficit hyperactivity disorder (ADHD) and problem gambling in a probabilistic reward-learning task

Problem gambling is thought to be highly comorbid with attention-deficit hyperactivity disorder (ADHD). We propose that the neurobiological pathologies underlying problem gambling overlap with those in ADHD. In this study, we used a simplified computerized version of the Iowa Gambling Task (IGT) to assess differences in reinforcement-driven choice adaptation among participants with pathological gambling and/or ADHD. The task contained two choice options with different net payouts over the session; a good bet that resulted in a win of +50 points on 60% of trials (and −50 points on 40%), and a bad bet that resulted in +100 points on 40% of the trials (and −100 points on 60%). We quantified participants’ preference for the good bet over the session and their sensitivity to reinforcement. Both the control subjects and medicated ADHD nongamblers significantly increased the proportion of good bets over the 400-trial session. Subjects with problem gambling performed worse than controls and ADHD nongamblers, but better than our limited sample of unmedicated ADHD gamblers. Control subjects, medicated ADHD nongamblers, and unmedicated ADHD nongamblers tended to tolerate losses following good bets, whereas unmedicated ADHD gamblers tended to tolerate losses following bad bets. These data reveal that ADHD, particularly when treated with medication, is not associated with poor choices on the IGT, but may exacerbate pathological choices in problem gamblers. It seems that stabilization of dopamine signaling that occurs when ADHD is treated is itself also a treatment for certain forms of problem gambling.

Malamud's “Subject Matter”:

Malamud's “Subject Matter”:

Editorial

The theme of this issue of IEEE Potentials is “sustainable design”—a nascent but very promising area of research that aims to eliminate our negative impact on the environment through smart engineering. We have a lineup of articles from renowned researchers all over the world who expound upon their ingenious ideas to preserve the environment through skillful design of products, buildings, and services. While organizing the contents of this issue, my thoughts turned from sustainable designs that will endure to entire engineering companies that will last the test of time. In today's competitive marketplace, “high-tech” industries (a term our friends in business schools use for all electrical/electronic product companies) especially have a hard time sustaining their dominance. Anyone familiar with the high-tech sector will appreciate that one bad bet placed by an electrical engineering (EE) company on the future of electronics can result in calamitous results, as proven in the case of Xerox or Hewlett-Packard, to name just two.

Managing Regulatory Risks from Changing Climate Policy

Significant business risk derives from the likelihood that the policy and legal environment with respect to climate change will change quickly, imposing costs on greenhouse gas emitters and other businesses with large carbon footprints. Advice on how to manage this kind of risk is written largely on a tabula rasa; there is precious little on climate change, conflicting signals on where law and policy will go next, and little guidance or signals from government on what to do to prevent or prepare for climate change. This short paper discusses management of the legal and regulatory risks posed by changes in law or policy for Canadian businesses. It does so in three areas of law in which the risks appear to be the most specific: (a) Canadian federal law and policy, (b) British Columbia provincial law and policy, and (c) securities disclosures law in the United States and Canada. The most dangerous policy risk faced by Canadian businesses stems ironically from the Canadian federal government's desire to avoid imposing costs from climate policy. The problem is that in this environment of policy uncertainty, Canadian businesses will still have to make decisions on capital expenditures, and prudent decision-making may still cause them to bet on a continued lack of Canadian federal seriousness on climate policy. In fact, the current proposed regulation requiring carbon capture and storage technology for coal-fired power plants nudges them towards making a bad bet on future policy. The regulation's unambitious carbon capture target of 30% ensures that money spent on carbon capture technology will be poorly spent on technology that will quickly become obsolete.Truly prudent business planning requires Canadian businesses to anticipate a future global policy environment in which greenhouse gas reductions will be taken much more seriously and will involve a carbon price, and that foreign pressures will force Canada to follow suit. This is still an ambitious proposition for publicly-traded companies that must justify capital expenditures to investors. As a result, the Canadian federal policy of trying to insulate Canadian businesses from geo-political realities with respect to climate change enables and encourages not only greenhouse gas-emitting behavior, but also the ultimately wasteful expenditure of money on capital investments that will prove ineffective in a post-climate change economy.

Banking on a Bad Bet

Probability matching is the tendency to match choice probabilities to outcome probabilities in a binary prediction task. This tendency is a long-standing puzzle in the study of decision making under risk and uncertainty, because always predicting the more probable outcome across a series of trials (maximizing) would yield greater predictive accuracy and payoffs. In three experiments, we tied the predominance of probability matching over maximizing to a generally adaptive cognitive operation that generates expectations regarding the aggregate outcomes of an upcoming sequence of events. Under conditions designed to diminish the generation or perceived applicability of such expectations, we found that the frequency of probability-matching behavior dropped substantially and maximizing became the norm.

Gambling and Globalization: Still a Bad Bet

Gambling and Globalization: Still a Bad Bet

Banking on a Bad Bet Probability Matching in Risky Choice Is Linked to Expectation Generation

Banking on a Bad Bet Probability Matching in Risky Choice Is Linked to Expectation Generation

Non-reversible betting games on fuzzy events: Complexity and algebra

A bad bet is a bet for which we can find an alternative system of bets over the same class of events ensuring to the bettor a strictly better payoff, independently on the truth values of the events involved. In this paper we study the computational complexity for the problem of deciding whether a book arranged on fuzzy events avoids bad bets or not. Call admissible a book that avoids bad bets. Following the approach initiated by Mundici and pursued by Flaminio and Bova for reversible betting situations, we settle the complexity of the admissibility-problem to be NP-complete. We also present a variety of algebras, and an algebraizable modal logic, that allow us to characterize admissible books in terms of 1-satisfiability of suitable defined theories. Studying the computational complexity for the 1-satisfiability problem of a formula in this variety, we provide a second, algebraic-based, NP algorithm to check admissible books.

Life chances: Brains or brawn - which was best?

In the unstable environment of east Africa 6 million years ago, some of our ancestors' cousins went for bigger jaws rather than bigger brains. Bad bet

Targeting in Social Programs: Avoiding Bad Bets, Removing Bad Apples

Targeting in Social Programs: Avoiding Bad Bets, Removing Bad Apples