Betting biases are one of the main reasons why bookies manage to make money from inexperience betters. A bias is a psychological factor which impedes us to make rational decisions. If you want to know why we can’t use rational reasoning when placing bets, you might want to learn more about the anchoring bias.The Anchoring Bias Picture
The anchoring bias refers to the human tendency to get overly attached to a certain decision making factor. Once we anchor on a piece of information which we consider to be accurate, we find it very hard to be objective in regards to that information. This cognitive bias usually involves the first information that we come in contact with. People tend to accept the first information that they consider to be true and their future judgement is based on that initial information. It is not uncommon to adjust and judge the information that we later receive based on the initial information that we accepted to be true. Determining value solely on one factor can be very dangerous in the betting world.
In order to understand this betting bias we will analyze a soccer example. Lets say that there’s an upcoming soccer game between Team A and Team B. Both teams are relatively strong so the odds are rather balanced. However, if Team A suddenly announces that a couple of key player won’t be able to play due to recent injures, the situation is no longer balanced. A beginner better will hold on to this piece of information. As he already established that the two teams were equally promising and Team A now has an advantage, the recreational better will immediately decide that Team B will be the definitive winner. Even if the injured players are replaced with decent players, a recreational better will not consider the possibility of Team A winning. In this situation, the better’s reasoning is clouded due to the fact that he is anchored by the initial information of the injured players. The anchoring is also confirmed by the change in the bookie’s prices.
The adjustment heuristic refers to a situation in which a better stars with an anchor information and from that point he will make adjustments in order to reach his own estimated relevance of the correct price. The problem with this system is that all future research is based on the initial information. In order to avoid this heuristic you need to make your own game estimate before checking the odds or any sports tips. You must base your judgement solely on your instinct and your research of past performances. This way, your anchor point will not be influenced by news or tips. It is a great way to be objective to all the decision making factors that you encounter. Another way of avoiding the effects of the anchoring bias is to look at the time when the news or tip was published and how it affected the market price. However, you must be very quick in doing this research because the bookies are also very quick when it comes to adjusting their prices. Furthermore, if the prices rise a lot but then they downgrade to the original value, that means that the initial news was not very relevant.