Examining the impact of consecutive losses on gambling: When do we decide to quit?

Gambling is defined as the act of risk-taking in the hopes of a desired result. Despite the odds of the desired outcome being unreasonably low in some cases, some individuals still choose to gamble since humans are not always perfectly rational. In the modern day, gambling has moved online, worsening its negative effects as access becomes increasingly easier. In response to the rise of online gambling, we investigated an important factor that helps us determine when people decide to stop gambling. Specifically, we studied how consecutive wins or consecutive losses in a game influence an individual’s decision to quit gambling. We apply various theories such as the gambler’s fallacy, loss aversion, sunk cost fallacy, and an original concept termed the “three strikes heuristic”. We created a coin-flip game with 277 participants recruited via an online research platform. We hypothesized that the probability of quitting would initially decrease after a few consecutive losses but would then increase after reaching a higher threshold of consecutive losses. That is, we predicted that the threshold for which the probability of quitting would increase would be three consecutive losses. Our results showed that the probability of quitting increased after reaching a threshold of four consecutive losses. Interestingly, we also found that participants commonly had balances of 10 and 20 tokens ($0.20 and $0.40) when they decided to quit — representing an increase or decrease of 5 tokens from the starting balance of 15 tokens. This suggests possible thresholds individuals may have for deciding when to stop gambling. Our work has implications for potential intervention strategies to reduce online gambling.