Apr

5

The Psychology of Risk: A Brief Primer, Paul Andreassen

ILLUSION OF CONTROL

In principle, the distinction between skill and luck would seem clear. Skill situations are characterized by a causal link between behaviors and outcomes. Success in skill tasks is controllable, whereas success in a chance activity is not. Yet the distinction is often not recognized. ln a series of essays and studies, Ellen Langer showed how people often treat a chance event as if it involved skill and was therefore under their own control. Studies conducted in Las Vegas casinos have found that a dealer who experiences a run of bad luck risks losing his or her job. Dice players often concentrate carefully on the outcomes they desire, throwing their dice harder when they need higher numbers and tenderly when low numbers are required. Langer argued: "by encouraging or allowing participants in a chance event to engage in behaviors that they would engage in were they participating in a skill event, one increases the likelihood of inducing a skill orientation; that is, one induces an illusion of control. By introducing choice, familiarity with [the situation], active involvement, or competition into a chance situation where people cannot influence the outcome, they will show behavior more appropriate to a skill event." 

Alan Millhone writes:

"Luck is the residue of preparation." Vince Lombardi

In Marion, Illinois this past week-end I was playing young Patrick Parker in the final round of the Illinois Checker Tournament. Patrick 'pitched' me a piece (checker) and got a King and was behind me causing havoc with his free King. We got to a critical juncture and I made a brilliant move and considered all of Patrick's replies. He made his move and we made a couple of jumps and he ended up with his free King 'pinning' my King and one of my singles in mid board.

I looked over the situation and noted I had to move out my sole single piece from my King row and thus allowed his long trapped King to move. The situation appeared hopeless and I resigned my position as untenable. I must have become 'brain dead' as I was still a Checker piece up on Patrick! Mr. Larry Keen took me aside after the game and set up our ending and asked why I did not move here and here to a draw. The draw was easily seen after he showed it to me! In the end I failed to review the total situation in our game and never even counted each side's pieces.

The Market can also be deceptive and induce one to sell too quickly at times. You have to do your homework in checkers and in the market to make educated decisions that affect the final outcome. Mr. Tom Wiswell said to "keep the draw in sight." In other words, don't overreach your position. Better to live to play another day.


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