Sandbox

Tuesday’s child

Author Michael Shermer pens a column for SciAm and has written several useful books on "skepticism" and science.

In his recent book (The Mind of the Market, 2008) on how evolution has shaped human economic behavior, Shermer writes:

[More important], gamblers also tend to underestimate the number and length of winning streaks and lose out on the reward of placing larger bets during them. Of course, even with an optimal betting strategy that plays to win every hand, and keeping loss aversion in check, if you play long enough you will lose because of the slight edge to the house built into the rules of the game. But casinos make even more money than the house percentage would predict because of our loss aversion.