How we decide to hold 'em or fold 'em

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How we decide to hold 'em or fold 'em
You’re in the Oval Office and you’re holding a bad hand—your demand for a wall which almost no one other than your most ardent supporters wants—one with a very low chance of winning. Even so, the sight of the large stack of chips that piled up during a recent lucky streak (the 2016 election) nudges you to place a large bet anyway (an address to the nation).
Why do people make high-risk decisions—not only in casinos, but also in other aspects of their lives—even when they know the odds are stacked against them?
A team has found that the decision to “up the ante” even in the face of long odds is the result of an internal bias that adds up over time and involves a “push-pull” dynamic between the brain's two hemispheres.
What the researchers say: Whether you are suffering from a losing streak or riding a wave of wins, your cumulative feelings from each preceding hand all contribute to this nudge factor, they say. A paper on the study is published in the journal Proceedings of the National Academy of Sciences.
Insights from the research have the potential to shed light on how soldiers in high-risk combat situations make decisions and to facilitate more effective brain training to change or “rewire” long-term behavior or habits, the researchers suggest.
“What we learned is that there is a bias that develops over time that may make people view risk differently,” said the senior author.
The group sought to understand why people tend to take risks even when the odds are against them or avoid risk even when the odds are favorable. They also wanted to learn where in the human brain such behavior originates. They asked patients at the Cleveland Clinic's Epilepsy Monitoring Unit to play a simple card game involving risk taking.
The patients had undergone stereoelectroencephalography, a procedure in which doctors implanted multiple deep-seated electrodes in their brains; that was designed to allow the doctors to locate the source of seizures for future surgical treatment. Each of these depth electrodes has 10 to 16 channels that record voltage signals from the neurons surrounding it. The electrodes also allowed the lead researcher and her team an intimate look at the patients' brains in real time, as they made decisions while gambling against a computer in a card game.
The game was simple: The computer had an infinite deck of cards with only five different values—2, 4, 6, 8, and 10—each of which was equally likely to be dealt. Following every round, the cards went back into the deck, leaving odds unchanged.
Participants were shown two cards on a computer screen, one face up and the other face down. (The face up card was the player's, and the face down card was the computer's.) Participants were asked to bet low ($5) or high ($20) that their card had a higher value than the computer's face down one.
When dealt a 2, 4, 8, or 10, participants bet quickly and instinctively, the research team found. When dealt a 6 however, they wavered and were nudged into betting higher or lower depending on their bias—even though the chances of picking a higher or lower card were the same as before. In other words, participants' betting behavior was based on how they fared on past bets even though those results had no bearing on the outcome of the new bets.
On examining neural signals recorded during all four stages of the game, the researchers found a predominance of high-frequency gamma brain waves. They were even able to localize these signals to particular structures in the brain. It turns out that these were associated positively or negatively with risk-taking behavior.
“When your right brain has high-frequency activity and you get a gamble, you're pushed to take more of a risk,” said the co-author, who expressed surprise at the symmetry of the patients' brain reactions under these conditions. “But if the left side has high-frequency activity, it's pulling you away from taking a risk. We call this a push-pull system.”
To assess that internal bias, the researchers developed a mathematical equation that successfully calculated each patient's bias using only their past wagers.
“We found that if you actually solve for what this looks like over time, the players are accumulating all the past card values and all the past outcomes, but with a fading memory,” say the researchers. “In their words, what happened most recently weighs on a person more than older events do. This means that based on the history of a participant's bets, we can predict how that person is feeling as they gamble.”
So, what? One of the purposes of bias—of whatever kind—is to enable fast decision-making. We are designed to make snap decisions which were important to our hunter-gatherer ancestors’ survival. The longer we took to make a   choice—say to flee or freeze when we saw a cheetah—increased our jeopardy. This makes us bad strategists (chimps are much better). Good strategic planning assumes you have the time and, if you’re defenseless, you don’t. Our biases enabled our survival.
Dr Bob Murray

Bob Murray, MBA, PhD (Clinical Psychology), is an internationally recognised expert in strategy, leadership, influencing, human motivation and behavioural change.

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