In essence, gambling is a task of making value-based decisions involving situations with uncertain outcomes. Understanding and calculating risk is key to determining whether the potential distribution of outcomes is worth your bet.

Why is it that some people are better than others at making decisions under uncertainty? In a betting context, often decisions are overwhelmingly complex. An advantage is therefore bestowed upon those with superior arithmetic, probabilistic thinking, a good memory, and in some cases, domain knowledge. In some way or another these factors are cognitive skills that are (or can be) learned. But what about non-learned factors?

The Illusion of control

While the illusion of control motivates a belief that we humans are in control of almost everything, this fallacy in turn results in us often overlooking both inherent randomness, and those factors that we believe are out of our direct line of influence.

Research into a number of these factors that generally operate below our consciousness, but nevertheless may affect our complex decision-making faculties has revealed some interesting results.

This article takes a slightly different path to those I have written before, exploring the intersection of human psychology and physiology, and decision-making. While I don’t mention odds or sport, I think some of the research conducted in the field is interesting and definitely applicable in some senses to betting on sport.

The somatic marker hypothesis

The pre frontal cortex in the brain’s frontal lobe is tasked with, among other things, complex decision making. In one study, people with damage to the pre frontal cortex were shown to have a severe impairment in their decision-making, in reference to their poor performance in the Iowa Gambling Task. This decision-making deficit was observed despite otherwise normal intellectual functions.

The Iowa Gambling Task is a simple game where participants are evaluated on their decision making under uncertainty. If you want to have a go, you can try it out for yourself online. Skip the next paragraph if you want to try it later.

In the Iowa Gambling Task, participants are faced with four face down decks of cards, and are tasked with selecting one deck at a time to reveal the top card. Each card either rewards the player, by awarding them money, or punishes the player, by deducting money from their initial bankroll of $2,000.

The goal is to make as much money as you can, or lose the least. Unknown to the player, in two of the decks, although rewards are higher, punishments actually outweigh rewards. Conversely, in the other two decks, rewards outweigh punishments (despite rewards being lower).

In the paper I mentioned above, the researchers found that people with damage to the pre frontal cortex were insensitive to future consequences, positive or negative, and are effectively oblivious to the future. Instead they are primarily guided by immediate prospects, and don’t exhibit a capacity to learn from their mistakes, when making decisions under uncertainty. Another study found that even under certainty, people with pre frontal cortex damage will tend to make impaired judgements.

It goes without saying that these are unwanted traits when betting, regardless of what it is you’re betting on. A decision deficit in psychopathic personalities and people dependant on drugs, including cocaine and alcohol, has also been suggested to parallel results from people with pre frontal cortex damage. It stands to reason then, that the differing operation and functionality of this area of each of our brains could significantly influence outcomes when we gamble.

The pre frontal cortex is also associated with the expression and experience of emotion. Noticing the corresponding inability for patients with pre frontal cortex damage to express emotion, neuroscientist Antonio Damasio, proposed the somatic marker hypothesis

Somatic markers are physical reactions of the body that alert the brain to recall a past situation and corresponding outcome. An example of one of these physical reactions is an increase in the electrical conductance of human skin that occurs in response to certain stimuli, such as a gamble.

Over time, somatic markers such as this become linked to the outcomes of historical situations, and in turn, future decisions are influenced through the experience of recalled emotion, especially when cognitive process become overloaded.

The somatic marker hypothesis is distinct from pure risk taking. High risk takers with no frontal lobe damage do elicit an anticipatory skin conductance response when making an uncertain decision, while those with damage do not. This suggests that risk taking and decision making are not necessarily linked, as one might expect.

More generally, the ability to make sound decisions under uncertainty may be uncorrelated to risk aversion. A better gambler may just be superior at overriding the emotional response when faced with decision uncertainty, instead reverting to higher cognitive processes. The somatic marker hypothesis proposes that individuals make judgements not only by assessing the severity of outcomes and their probability of occurrence, but also in terms of their subconscious emotional responses.

The impact of emotional influences

What about the corollary? Can decision making be biased by ones prevailing emotional state? The answer is yes, however it’s whether emotion hinders or aids decision making that is debated. Evidence for emotions hindering decision making includes the mood congruence judgement effect, which explains that people tend to recollect memories (and thus make biased decisions based on these memories) that are associated with their current mood.

Conversely, feelings are thought by some to aid the decision-making process through engaging mindful attention and working memory. Other research has shown enhanced decision processing for people in both positive and negative affective states.

A number of other studies examining the effect of emotion on decision making demonstrated that it’s not so much what feeling you’re experiencing, but rather how you deal with that feeling. If you can mindfully experience emotion, and attribute it to the correct cause, the potential for biased decision making may reduce. A particular study showed that stock market investors who experienced more intense feelings made better decisions.

Can hunger help with a bet?

A recent paper provided further evidence that hot states (such as emotion or hunger) can aid complex decision making with uncertain outcomes. The study examined the effect that being hungry had on people’s performance in the Iowa Gambling Task. Hungry participants performed better than their sated counterparts.

The researchers suggested that people in that hot state (hunger) are better able to judge the risk reward trade off necessary in making a complex decision under uncertainty. In a similar vein to the examples above, the researches in this study linked this conclusion to the greater reliance on emotion in guiding decision making when hungry.

As you may be beginning to see, the factors affecting our decision making could potentially be endless. Another line of research has found that individuals with a higher body mass index (BMI), higher body fat percentage, and/or higher leptin and insulin concentrations perform worse on the Iowa Gambling Task. Who would have through that body composition could also play a role in complex decision making?

Making good decisions under uncertainty depends on a myriad of factors. We know for sure what some of these are, especially those that are cognitive. A good memory, probabilistic thinking, and an understanding of risk, for example.

Less understood however, are factors we likely overlook, or those that we are completely unaware could affect decision making. These factors include pre frontal cortex function, emotional state, hunger, and body composition. There are probably plenty more. In any case, every time you make a complex decision under uncertainty (for example gamble), you are at the whim of countless, often subconscious processes affecting your ability to act optimally.

An awareness of how the factors mentioned in this article are likely to affect you, may allow you to more easily account for the potential resulting biases, instead reverting to higher cognitive processes that can be improved over time.