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Everyone likes to think that they are rational and objective, but the truth is we’re all flawed thinkers. We’re subject to systematic errors in the way we process and interpret information and these errors often lead us to make shoddy decisions and judgments. When you’re betting on sports, this can be costly.
So how can the average sports bettor improve their decision-making process?
Professional sports bettors are able to sideline emotion and mitigate bias, so they can make rational betting decisions. While we can never completely root out bias from our thinking, being mindful of bias can help us make better sports betting decisions. And with your money at stake, it’s worth the effort. So here are four major cognitive biases that undermine sports bettors (and cost them money).
1. Availability Heuristic & Recency Bias
The availability heuristic describes our tendency to judge the frequency or likelihood of an event based on the ease with which instances come to mind.
Availability can mislead us in a variety of ways when we’re making decisions about future events. A salient or dramatic event that captures your attention may lead you to exaggerate the frequency or probability of that event occurring again. We often remember certain events more vividly than others, which can increase the weight we assign to those occurrences as well.
Consider the following two examples:
Suppose that you watched the Chargers play twice in the last four weeks and both were peak performances, with Justin Herbert leading an unstoppable aerial attack that resulted in two wins.
The other two weeks you missed them play were mediocre performances during which the defense couldn’t stop anybody and the offensive line broke down. You’re more likely to have an overly positive view of the Chargers because you vividly remember watching them look great and have no recent firsthand memory of them playing poorly. If you saw all four games, you’d likely have a more balanced view of their inconsistency and wide variance.
Early in the 2021-22 season, the Indianapolis Colts had a tough schedule and started 1-4. Suppose you bet big on them twice in that period and lost both times. With those recent losses top of mind, you become averse to betting on the Colts. In the following few weeks you don’t watch them closely, and maybe you resist recognizing as they turn the tide. Consequently, you’re slow to update your evaluation of the team and you miss chances to win money betting on them as they win eight of their next ten games.
Closely related to the availability heuristic is recency bias.
Recency bias leads us to assign more weight or relative importance to recent events because they are more easily recalled (more available).
Recency bias in sports betting is rampant. Sports fans and bettors routinely overreact to the last game a team played. While recent performances are important to consider when betting on sports, it’s easy to discount longer-term performance or statistics that are not as fresh in our mind.
For example, you might completely dismiss the idea of betting on a team that just got blown out, even if they had been playing reasonably well prior, the upcoming matchup is favorable, and the underlying statistics point to an advantage.
2. Confirmation Bias
Confirmation bias is the tendency to search for and interpret information in a way that confirms your preexisting beliefs or supports your hypothesis. Confirmation bias is one of the more common cognitive biases. We all do this – all the time.
A closely related phenomenon, often synonymous with confirmation bias is motivated reasoning. We don’t just convince ourselves of what we want to believe and seek out information that agrees with those beliefs; we also forget, ignore, and discount information that contradicts those beliefs.
Our minds more often act like lawyers or soldiers, justifying and defending our beliefs, than scientists or judges, objectively considering the facts.
As psychologist Tom Gilovich puts it, “For desired conclusions, we ask ourselves, ‘Can I believe this?’, but for unpalatable conclusions, we ask, ‘Must I believe this?’ We’ll seek any reason to reject the unacceptable conclusion.”
You can see this among “experts” and pundits on tv, and everywhere on social media when people share facts that support their opinion or news stories that support their preferred narratives.
Confirmation bias and motivated reasoning are easy to spot in others but tricky to spot in ourselves.
We might slightly favor an outcome because we have a subconscious affinity (or aversion) for a team or player. Maybe we lock in on an NFL matchup we like early in the week and fall into the trap of seeking out information to support that bet. Or we become attached to a view we have about a team and don’t realize we’re invested in being right about it.
The best sports bettors can get off bets when they encounter new information that points in favor of the other side.
The bottom line is, that bias in favor of our preexisting beliefs impacts how we select and interpret information and can lead us to seek out a rationale to bet on one side or against the other.
Here are a few basic practices to combat confirmation bias:
- Maintain an open, receptive mind. Readily take in new information and update your models accordingly; don’t let your evaluations become stale.
- Proactively take a skeptical view of your evaluations by seeking out evidence that supports the other side. When you come across information that opposes your opinion, give it deliberate thought and consideration.
- Conduct a premortem: Before making a bet, fast forward to the future and imagine you lost. How did it happen? What did you miss? Ask yourself, how can be you wrong?
Joining a sports discussion and betting community like CaptainPicks is also a great way to mitigate confirmation bias, Exposing yourself to a variety of opinions and perspectives will help you expose potential holes in your analysis or beliefs.
3. Hindsight Bias
“A general limitation of the human mind is its imperfect ability to reconstruct past states of knowledge, or beliefs that have changed. Once you adopt a new view of the world (or part of it), you immediately lose much of your ability to recall what you used to believe before your mind changed.” – Daniel Kahneman
Hindsight bias refers to our tendency to look back at an unpredictable event and think it was easily predictable. We tend to overestimate our ability to have predicted an outcome at the time a decision was made.
Hindsight bias is also known as the “knew-it-all-along effect.”
We immediately assimilate the event, new information, solution, or outcome into our knowledge base and lose complete sense of what was knowable at the time of the decision. Unforeseen outcomes quickly become foreseeable after the fact.
Hindsight bias makes Monday morning quarterbacks out of all of us. We criticize the decisions of others when they work out badly – even if the decisions were actually good. We’ll credit ourselves with foresight and keen judgment when a high-risk gamble results in a lucky win. But we’re also quick to blame bad luck when we lose rather than scrutinize our betting strategy or process.
Hindsight bias is most common after negative outcomes. Any sports bettor is familiar with the experience after losing a bet when suddenly the factors that led to losing become crystal clear and obviously identifiable.
If your takeaway after losing is you “knew-it-all-along” or just got unlucky, it will be hard to improve as a sports bettor.
Don’t let yourself labor under the delusion that you knew or should have known the outcome beforehand – doing so can distort your perception of past bets you’ve made. Make an effort to learn from how events and bets play out and integrate new information into an updated betting strategy, process, or team/player evaluation.
4. Outcome Bias
Outcome bias is when we judge our decisions based on the outcome rather than the quality of the decision-making process.
In sports and sports betting, it’s black or white – you either won or lost – which makes it easy to succumb to outcome bias. But outcomes can result largely from luck, variance, and relevant factors.
In any given game, just one mistake, one bounce of the ball, one dodged bullet, and a few key plays will decide the outcome. All sports fans know that final results can be misleading, often offering little indication of how a game actually played out.
It’s important not to focus on whether the outcome was good or bad, but on whether the process and strategy that produced the decision was sound.
While it’s easy enough to criticize our bad decisions when they result in bad outcomes, we often fail to be sufficiently critical of bad decisions that result in positive outcomes.
Suppose you bet on Raiders +7 against the Chiefs and the Chiefs win 30-24 – you win your bet.
In the game, the Raiders have a kickoff return for a touchdown, a flukey pick-six, and the Chiefs outgain the Raiders 500-300 in yards from scrimmage. Under the spell of outcome bias, you might pat yourself on the back for winning the bet and move on. But a clear-eyed bettor would acknowledge their luck. They’d recognize the Chiefs dominated the game and try to determine what they missed in their evaluation.
If you focus too much on the outcomes of your bets, you’re susceptible to drawing the wrong conclusions about the quality of your decisions, your betting strategy, and even your evaluations of teams and players.