On Gambler's Optimism

Gamblers, derided by society, a bunch of degenerates who can’t control their emotions. Spending valuable cash on trips to Vegas, Atlantic City, Montreal, among many other destinations that provide that uniquely stressful experience of putting money on odds that are stacked against them. Yet, we still do it. Gambling, an industry based on stacking odds against players, is worth more than $100 billion in the US and still growing. This type of growth is most likely based simply on the optimism of gamblers. Although, yes, there are many reasons that may make people put their hard earned, or maybe somebody else’s, money on the line, we could boil it down to basic optimism. No matter how much of a negative person you are, how miserable you feel, you throw your money into the ring because you feel like there’s a chance. And at the point that you throw your money in, the probability of losing is outweighed by the potential feeling of winning. Let’s just say, we ignore reason for potential euphoria. Does that make sense? No, obviously. Is it true? 100%. A casino is built on the premise (fact) that you will lose more that you win, and we still go in. Our expectation of a positive outcome outweighs actual odds, even though we do not do the actual calculation in our head. But if we absolutely had to do the calculation before placing a bet, taking roulette odds of hitting 1 of the 35 numbers, it would go something like this:

Of course, you can adjust odds of winning in your favor by diversifying your bet, including other numbers or even betting on whole sections of the table. But the point is: the game is designed to make you lose more than you win, and you know it. Now, it’s not all bad news. Given that that some have this optimistic impulse, this optimistic nature, what if you could change the odds in your favor, say, outside casino, outside a racetrack? What if you had some insight into a void in our daily lives and you knew how to fill it? What if the casino was our economic system where you could place a more logical bet? Let’s say you have done your research and you believe you can profit from investing (betting) on a specific business in an area and industry that you understand. The odds could look something like this:

Now the odds don’t look so bad. The actual odds are unknown since you would have to use an estimate based on a similar venture and still there are just too many variables to consider. The only thing that’s for certain is your belief and your optimism about the opportunity. The idea drives you to not give up since you can keep adjusting the odds in your favor as you try to foresee drawbacks and act accordingly. This kind of casino seems more favorable. However, if the ideas of these type of gamblers (entrepreneurs) don’t provide value then they don’t profit. Which means that the only way that they can profit is if we buy in. Somehow, someway these people make our lives better when they come up with a new product, business or idea. Given a market where there’s competition, only the best product will survive or in other words, the product we choose to make our lives better will survive. That’s why we should thank these degenerates and their gambler’s optimism for believing that they can profit from their ideas. Which in the end will make our lives, if not easier, at least more interesting.