Quitting on time: application to slots play
Every decision we make is under the influence of two sources of uncertainty: the first is pure luck, the other influence is hidden information. If I play online slot game, I don't control the symbols that are coming. That's a pure luck. Should I win during the first 10 spins, I am lucky. Hidden information is something that's revealed after I start play: at the beginning we know very little of what there is to be known.
In a world of online gambling signs of problem play are evident: long playtime, late night sessions, losing more than a player would lose on average per playtime, increasing stakes when losing, etc. But what is a problem if not an inability to quit on time? So, how do you know when it’s the right time to quit?
In an ideal situation, the exact time to quit would be when the expected value — what you’re getting out of the path you’re on — is no longer worthwhile, either on its own or in comparison to other paths that you might want to take.
Online slots are made as a one way game: the 'manuals' are insufficient to get prepared to the game, turbo spins and auto-spins steal the sense of time and play (it is not surprising that they might be declared illegal too) and 'buy bonus' feature makes you think you doing a 'investment' that shall be returned with interests. Think of it: what kind of investment is it when you don't know the odds? Buying something with a view to get more, i.e. investment, exploits embedded cognitive biases with a player. That’s a sunk-cost fallacy problem.
In a famous experiment by Steven Levitt, the economist who wrote Freakonomics, the tough decisions - deemed as 50-50 choices (relations, job decisions. etc) - were given to decide on a flip of coin. After 6 months, people interviewed were asked where they feel about the choice that has been made for them: majority of those who were 'told' to quit would feel much more happy, than those who were told to hold. The experiment showed that the moment when people felt it was 50-50, it was actually well past 50-50.
But why is it so?
In the battle of the popular mind, grit is the clear winner. Grit is a virtue. It’s a sign of character. The value of grit is something that keeps you holding on to worthwhile things that are also hard. Players might be watching streamer sessions where they'd hit 10,000x wins and say to themselves: "It was hard. But they did it because they chose to stick".
So, in reality we tend to quit too late when news are bad, but quite too early when we are ahead. Suppose we start to play a new online slot game and play it for half an hour to realise we have no luck. “If I quit now, I’ll have wasted my time”, - we may often think. The sunk-cost effect of a quit decision is what keeps us playing further. "What if I quit now and the win is just the next spin?". That is the question of 'internal validity': I am going to view myself as being inconsistent?
What matters is how a player does in the long run, because online gambling is one long game, and life is one long game. Slot providers must cultivate the idea "I am going to play till I feel I am playing well. Not any longer". In reality, they almost always would like to put a player in position "I lost. I need to return my money". And this is how things get really bad. Slots players find it very hard to quit games when they’re losing. BUT, you have to do that, so you can get yourself in a better position later. Slots providers, as leadership, have to remind them that it’s one long game.