I have always eschewed chance and favoured certainty. If that makes me a boring person, then so be it.
While taking risks are part and parcel of the business world, those of you who are involved in new business development would understand what I am saying when when I say that in spite of inherent risks in embarking on new business ventures, sound acumen requires us to turn our minds to the reduction and minimisation of risk so that the chances of success (i.e. profitability) is more certain than not.
In this sense, the recent award (or, for the pedantic reader, re-award) of the sports betting licence by the Malaysian Government and, the subsequent corporate exercise, resulted in a positive market reaction (even if it has created indignation among socio-religious groups). The rewards of gambling to the promoters of gambling are a certainty.
On the flipside, the rewards of gambling to the gambler is uncertain; hence the public opprobrium on the perils of gambling.
So, here we are.
When there is a commercial motivation to understand and exploit the human mind, business gets there before science. Case in point: the power of near-misses to keep gamblers glued to a slot machine.
As anyone who has come oh-so close to winning a computer solitaire game and been unable to resist clicking "new game," or who has found it harder to walk away from a slot machine after spinning two bells and a lemon (a near-miss) than after getting a bell, a lemon, and a three-bar (a total miss), knows, near-misses are like crack. The reason, according to a paper in the current issue of The Journal of Neuroscience, is that near-misses raise activity in the exact same reward circuitry of the brain as wins do. And in a finding that offers insight into problem gambling, the brains of problem gamblers react more intensely to near-misses than casual gamblers do.
The reward circuitry runs on the neurotransmitter dopamine, which has been widely, if simplistically, called the brain's reward chemical. It is such an all-purpose molecule that it underlies the pleasure we get from (and, for some, the addictiveness of) drugs, alcohol, sex, chocolate, gambling, and (for the psychopaths among us) even causing others pain.
For their study, led by Luke Clark of the University of Cambridge, researchers recruited 20 volunteers. Their gambling habits ranged from buying a lottery ticket occasionally to making regular bets on sports. The volunteers played a computerized slot machine with two spinning wheels. When two pictures matched, the volunteer won 50 pence (about 75 cents). No match, no payoff. At the same time, the volunteers had their brain activity measured by fMRI, functional magnetic resonance imaging .
As expected, wins activated the reward pathways in the region called the midbrain. But so did a loss in which the second icon was right above or below the one that would have matched the icon on the first wheel—a near-miss. Since the bursts of dopamine indicated by the brain activity bring a sense of reward and keep people coming back for more, the fact that they are as intense as the bursts that follow a win suggests an explanation for the power of near-misses to keep people gambling. Although losing feels subjectively lousy, near-misses nevertheless spritz the brain with the dopamine that makes a behavior addictive.
The psychology behind this seems to be that people who play slot machines or the lottery, where wins and losses are the result of pure chance, often mistakenly believe that skill is involved. This illusion of control ropes gamblers into trying their luck after a near-miss. Compulsive gamblers have it worst: their brains reacted much more to near-misses than did the brains of casual once-a-month lottery players.
In a paper last year in the journal Neuron, Clark and his collaborators laid the groundwork for the latest finding. There, they reported that although near-misses while playing a slot machine felt less pleasant than wins (duh), they increased the desire to play just as much as long as players felt they had some control over their spins—supporting the idea that the illusion of skill underlies the phenomenon. (When the slot machine was rigged so that the computer chose what icon appeared on the first wheel, and thus what the second wheel would have to match for a win, players felt less control than when they were allowed to choose the left icon. Players seemed to feel that if they were permitted to choose, say, an orange as the icon to match, they had a higher chance of winning.) Near-misses, by activating the same circuitry that winning money does, "invigorate gambling through the anomalous recruitment of reward circuitry," Clark and his team wrote. But that study used ordinary people with no particular gambling habit, mild or intense. The current one shows that near-misses have even greater power over problem gamblers.
A little digging finds that although neuroscientists may be just figuring out the power of near-misses to keep gamblers playing, slot-machine makers have known about it for decades. In a 2008 study, scientists analyzed how "slot machine manufacturers use virtual reels and a technique called 'award symbol ratio' to create a high number of near misses above and below the payline"—that is, so that the losing icon appears right above or below the winning cherries, lemons, or whatever. Thus we see yet again that when there is money to be made by understanding the brain, business beats science.