Video Link: https://youtu.be/8nwz7QavWcU
In this episode, Charlie Munger shared the fourteenth causes of human misjudgment, bias from mis-gambling compulsion.
In this episode, you’ll learn:
What is bias from mis-gambling compulsion?
Why do people get addicted to gambling?
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CHARLIE MUNGER 00:08
Bias from mis-gambling compulsion. Well here, Skinner made the only explanation you’ll find in the standard psychology survey course. He, of course, created a variable reinforcement rate for his pigeons, his mice, and he found that that would pound in the behavior better than any other enforcement pattern. He says, “Ah ha! I’ve explained why gambling is such a powerful, addictive force in civilization.” I think that is, to a very considerable extent, true, but being Skinner, he seemed to think that was the only explanation.
The truth of the matter is the devisers of these modern machines and techniques know a lot of things that Skinner didn’t know. For instance, a lottery… you have a lottery where you get your number by lot and then somebody draws a number by lot? It gets lousy play. You get a lottery where people get to pick their number, get big play. Again, it’s this consistency and commitment thing. People think that if they’ve committed to it, it has to be good. The minute they’ve picked it themselves, it gets an extra validity. After all, they thought it and they acted on it.
Then if you take slot machines, you get bar, bar, lemon. It happens again and again and again. You get all these near misses. Well, that’s Deprival Super Reaction Syndrome, and boy do the people who create the machines understand human psychology.
And for the high IQ crowd, they’ve got poker machines where you make choices, so you can play blackjack, so to speak, with the machine. It’s wonderful what we’ve done with our computers to ruin civilization.
But anyway, mis-gambling compulsion is a very, very powerful important thing. Look at what’s happening to our country. Every Indian reservation, every river town, and look at the people who are ruined with the aid of their stockbrokers and others.
Again, if you look in the standard textbook of psychology, you’ll find practically nothing on it except maybe one sentence talking about Skinner’s rats. That is not adequate coverage of the subject.