Safer bets during a winning streak?

I just stumbled upon this link in the economist magazine. The article claims that the reason for greater win %'s after the 2nd win is due to making bets with safer odds.

I don't bet football or horses. What does this mean? I can't think of a single casino game where this applies.

Here is a cut and paste from your linK:

"The explanation of the puzzle, Ms Xu and Dr Harvey found, was not that Lady Luck actually does smile on winners and frown on losers. Rather, as winners’ winning streaks increased in length they started choosing safer and safer odds, which led them to win more often, though less profitably. In contrast, those who had experienced a losing streak went for ever riskier bets, making it more likely the streak would continue.Hot hands, then, are real. But they are created by a gambler’s behavior rather than by fortune’s wheel."

This is probably true for a great many recreational gamblers (not pros) if you look at just one day in horse racing. There used to be a claim out there about horse racing which is unverified but I believe it is probably true. But the win percentages he quotes would not likely apply to horse racing but rather would to sports betting. The urban legend of horse racing is that in the last race the favorites and low odds horses will be better bets because most of the gamblers will have lost and they will be chasing their losses with longshots. I can't prove that this is true but it sounds logical. I'm sure he's not referring to casino games.

I was in Vegas during the Mayweather vs. Pacman fight. I was sitting at a BJ table at the bellagio, and I struck up a conversation with a gentleman. He said he was down $20K for the year and that he gathered up as much money ($30K?, don't recall the exact amount) he needed to win $20K on the favorite Mayweather on decision. We all know Mayweather won by decision. That gentleman became "EVEN" for the year on his bankroll.

The article is interesting, but I think there are too many holes and variables. On the contrary, if a losing gambler was more well off and had a deeper bankroll, I think this argument would be slightly different. I think the well off gambler would hedge it and pick the safer choice with a larger wager (kind of like a marty). I think the given scenario generalizes that most gamblers may have lost 80% of their bankroll before subsequently shooting for the long shot with their 20% bankroll.

How would you play it out if you had a $20K hole and wanted to get back even?

Ignore the hole. Play your money as if the present total is all that you have ever had. Choose bet sizes that reflect present bankroll reality, not fond memories.

Quote: pwcrabb

Ignore the hole. Play your money as if the present total is all that you have ever had. Choose bet sizes that reflect present bankroll reality, not fond memories.

Great advice.

Quote: SiegfriedRoy

I was in Vegas during the Mayweather vs. Pacman fight. I was sitting at a BJ table at the bellagio, and I struck up a conversation with a gentleman. He said he was down $20K for the year and that he gathered up as much money ($30K?, don't recall the exact amount) he needed to win $20K on the favorite Mayweather on decision, I mean comeon. We all know Mayweather won by decision. That gentleman became "EVEN" for the year on his bankroll.
The article is interesting, but I think there are too many holes and variables. On the contrary, if a losing gambler was more well off and had a deeper bankroll, I think this argument would be slightly different. I think the well off gambler would hedge it and pick the safer choice with a larger wager (kind of like a marty). I think the given scenario generalizes that most gamblers may have lost 80% of their bankroll before subsequently shooting for the long shot with their 20% bankroll.

How would you play it out if you had a $20K hole and wanted to get back even?

I agree there are many holes and many variables!