Management Summary Research Study “A heuristic based on transparently false likelihoods improves gamblers’ expected value in the wild”

Casino blackjack players learn a simple heuristic that helps them decide when to take additional cards. The heuristic assumes that all upcoming cards will be 10-value cards, even though that assumption is true fewer than one in three times. The heuristic results in systematic error, but it is also adaptive: it is easier to learn than the optimal strategy, the cost of using it is trivial, and its use is associated with better expected returns. The heuristic helps explain previous findings about expert judgments and decision making. The research relies on mixed methods: qualitative data from 1.5 years of ethnographic fieldwork and quantitative data from interviews with players about how they play each blackjack hand. The heuristic is used as a case to support several contentions: (a) despite established precedent, gambling is not a good metaphor for decision making under risk or uncertainty; (b) even in a small-world domain where outcome likelihoods can be calculated and monetary outcomes are unambiguous, using subjective probability to infer expected value may be both uncommon and non-normative; and (c) a focus on narrow, domain- and culture-specific heuristics and biases—despite their limited scope—offers valuable lessons about how, and how well, people make decisions.

Target groups of stakeholders: Research psychologists, behavioral economists, and management scholars and practitioners concerned with the contribution of culture to cognitive heuristics and biases in judgment and decision making.

Citation: Bennis, W. M. (2025). A heuristic based on transparently false likelihoods improves gamblers’ expected value in the wild. Mind & Society. https://doi.org/10.1007/s11299-025-00346-9

Source: https://rdcu.be/eLzN9