On Gambling; Addictions and Emotions

The researchers have discovered that the people who lose money on gambling are willing to spend more than the ones who win.

For example if one sets a limit of $200 for gambling, he will exceed that limit if he loses his money. On the other hand, if he would win money, he would stick to the limit. Eduardo Andrade and Ganesh Lyer, both marketing professors at University of California were the ones who made this discovery. They realized that the people who lose money on gambling will spend more money than they planned because of the pain associated with the loss. The ones who did not lose money did not experience this pain, and thus they use their common sense and stick to the plan. The ones who lose money use their emotions. The common thing to do when you lose would be to bet less, but the ones who lose money do the opposite thing. Instead of betting less money after a loss, they bet more money. They do this because they want to recover the money they just lost, and in most of the cases the decision will work against them. The two researchers did an experiment which involved various students.

The students stated that they will bet less in case they will lose money, and that they will increase their bet with a small percentage if they will win. They did not stick to the plan, as 90 percent of the ones who lost increased their wager. The ones who won did not change their plan, as they kept the same wager, or they increased it with a small percent. The researchers believe that this concept can be applied to the people who tend to spend too much money on shopping than they should. The shoppers, just like the gamblers are lead by emotions when they decide to make the purchase. In case you did not know, there isn’t a certain stereotype of a shopaholic, as anyone can suffer from this addiction. It has been discovered that there are various reasons why people tend to overspend, and those are either to take care of their self-esteem, to cope with a pain, or because they are materialistic. James Roberts of Baylor University’s Hankamer School of Business in Texas, is the one who conducted the research on the shopaholics, and he has reached to the conclusion that they let their emotions get the best of them when they do the shopping. Instead of thinking clearly about what they need, they use their emotions and they tend to buy things which they do not need.

Just like in the case of gambling, this can lead to all sorts of problems, from financial, to social, to marital ones. He has stated that shopping can be considered an addiction for some, because at fist, people shop in order to take care of a problem; to cope with a loss, and so on. In the end, they tend to become addicted to shopping, and they can no longer control their urges. These people will get into lots of problems because they end up owing lots of money which they will not be able to pay. Just like in the case of all the addictions, the one who suffer from compulsive shopping do not like to admit that they have a problem. Just like the alcoholics who hide their bottles in order to hide their vices, the shopaholics will hide or throw away the receipts for the things which they just purchased. In the majority of the cases, the ones who are addicted to shopping buy things in order to feel better. They want to take care of their internal problems through exterior factors, and that does not work. These people are not too cautious. In the case of gambling, it has been discovered that people are more cautious than careless, as they are more concerned about losing money than they are about winning them. An experiment revealed the fact that people are willing to wage their money only when they have at least a 50/50 chance of winning. When the odds are lower than that, they are not willing to gamble their money, as they are more afraid of losing them, then they are of winning.

The researchers analyzed the brain activities of their volunteers while they gambled money, and they discovered that the ones who did not have a high sensibility to losses relative to gains were the ones who did not like to gamble. These people were not willing to gamble their money, unless they had very high chances of winning. The people, who had a high sensibility to losses relative to gains, were the ones who liked to gamble. They did not care too much about losing money, but they cared about winning them. It has been discovered that when people win money, the areas of the brain which are activated when one takes drugs such as cocaine, become activated. That does not happen when one loses, and because of that, gambling can be seen as an addiction. People who gamble are addicted to the possibility of winning.