Farnam Street helps you make better decisions, innovate, and avoid stupidity.

With over 350,000 monthly readers and more than 88,000 subscribers to our popular weekly digest, we've become an online intellectual hub.

Are you too conservative at the blackjack table?

Apparently. (Omission Bias is the favor of inaction over action (our tendency to do nothing in some decision environments). Perhaps a better example of omission bias are parents who fail to vaccinate their kids even when this risk pales in comparison to the incidents of death caused by the primary disease.)

This paper uses proprietary data from a blackjack table in Las Vegas to analyze how the expectation of regret affects peoples’ decisions during gambles. Even among a group of people who choose to participate in a risk-taking activity, we find strong evidence of an economically significant omission bias: 80% of the mistakes at the table are caused by playing too conservatively, resulting in substantial monetary losses. This behavior is equally prevalent among large- stakes gamblers and does not change in the face of more complicated strategic decisions.

Source: Judgment and Decision Making, Vol. 4, No. 5, August 2009, pp. 385–396