Gambler's conceit

Gambler’s conceit is the fallacy described by behavioral economist David J. Ewing, where a gambler believes they will be able to stop a risky behavior while still engaging in it. This belief frequently operates during games of chance, such as casino games. The gambler believes they will be a net winner at the game, and thus able to avoid going broke by exerting the self-control necessary to stop playing while still ahead in winnings. This is often expressed as “I’ll quit when I’m ahead.”^[1]

Quitting while ahead is unlikely though, since a gambler who is winning has little incentive to do so, and is in fact rewarded for continuing to do so by their winning. Once in the throes of a winning streak the individual may even become convinced that it is their skill, rather than blind chance, causing their winnings, or good luck on their side, and thus it seems especially senseless to stop while continuing to win.^[2]

Contrast this to the Gambler's Fallacy where a losing gambler is convinced it is necessary to continue gambling because a streak of bad luck "has to" end at some point. The gambler's conceit frequently works in conjunction with the gambler's fallacy, convincing players that it is necessary to continue playing while winning, and necessary to continue playing while losing. Together, the gambler's conceit and gambler's fallacy keep players playing, whether winning or losing, until they eventually go broke.

Similarly, Gambler's ruin shows that a player with finite resources continuously playing will inevitably go broke against a player with infinite resources in a fair or negative expectation game. However, it also shows this to be true in a positive expectation game with two similar opponents provided the player with finite resources continually plays and increases his stakes when winning, but does not reduce them when losing.

As casinos have a house advantage in games of chance, a casino is more likely over time to take a player’s money than a player is to win money from the casino, and thus it is to the casino's advantage to keep a winning player playing in order to recoup their losses. Casinos thus frequently encourage winning players to continue playing. An example can be seen in the Martin Scorsese movie Casino where Robert De Niro's character ensures that a high-stakes gambler continues to gamble to ensure that the money won returns to the casino. On a smaller scale, casinos offer players free alcoholic drinks to encourage them to keep gambling.

Another illustration of the gambler's conceit is in cases of harmful physical addictions, such as smoking or alcohol. Although illness or even death are nearly certain if the addict continues to use, the addict rationalizes that they will be able to quit before becoming ill, while still indulging their physical addiction until then. Thus, while continuing a risky action the addict believes they will be able to stop while continuing to perform it.

See also

• Gambler's ruin
• Gambler's fallacy
• Inverse gambler's fallacy
• Behavioral economics

References