America the Casino : Part 1 - Psychology of a Winner

[rose-colored-coolaid]

The first interesting observation of our winning casino is that most people do pretty well on average. You gain 5% on average from every transaction. But the entire process is luck! However, why attribute your fortune to luck when its so much handier to attribute it to skill? If someone does better overall than others, then it behooves that winner to proclaim their own superior skill is what separates them from other individuals. Perhaps they choose the right tables, or maybe they sit in the right seat.

Perhaps surprisingly, the people who only collect 5% on average want to believe that this super winner poses extreme skill. There's no real shame in 5% gains, but if one person is doing much better, you'd sure like to know why it's not you. The optimistic and rational behavior is to accept that some skill must determine winners and losers, anything else is giving into the winds of fortune.

Finally, some people will lose. Maybe a few of those people hit on 19 (bad move in blackjack), but most were just unlucky. Surely these people would rather believe their loss is luck than skill right? Well...not exactly. First, they are surrounded by winners (big and small) who insist some skill is involved in the game. That's a hard social pressure to bridge. But on a deeper level, if they believe it is all luck, it would breed discontent. "Why am I penniless while the high roller does so well," a typical loser might wallow. But if they really decided that good fortune was all separating themselves from the winners, those who lost might demand a fair share. After all, the winners could become losers any time.

I find it haunting how closely this echoes the socio-economic status structure found in the world today.