Again on the problems with technology that makes it more convenient to gamble away your money

This news article by Sheelah Kolhatkar on the stock-market gambling app Robinhood reminded me of the creepy story a decade ago about some sleazeballs who were using statistics to locate and manipulate gambling addicts so as to bust them out.

It’s complicated. On one hand, gambling is fun, when done in moderation it causes no harm, and these companies are providing a service by making it accessible to people, in the same way that supermarkets provide a service when they sell alcohol. On the other hand, there’s a clear motivation to cater to addicts and get them to spend more. No easy answers. I guess this is just a special case of a general problem of our society of abundance. As a statistician I’m particularly interested in gambling because of its connection to probability and uncertainty.

17 thoughts on “Again on the problems with technology that makes it more convenient to gamble away your money

  1. Good point. And a useful boilerplate for summarizing ethical dilemmas in other fields. Like statistics:

    On one hand, [statistical modeling] is fun, when done in moderation it causes no harm, and these [statisticians] are providing a service by making it accessible to [social scientists], in the same way that supermarkets provide a service when they sell alcohol. On the other hand, there’s a clear motivation to cater to [social scientists] and get them to [model] more. No easy answers.

      • Whoa! I didn’t say anything about quantitative research in any way ruining the lives of social scientists— let alone in ways comparable those of drugs or gambling!

        Here’s the ethical issue as I see it— specifically with respect to the statistical modeling of observational (non-experimental) data:

        1: Statistical modeling approaches to causal-theoretical inference depend for their logic, coherence, justification, and presumed validity on the tacit assumption that individuals are qualitatively the same— homogeneous, isomorphic— with respect to the psychological structures and processes underlying their overt functioning, and that quantitative differences between them are produced by exactly the same psychological structures and processes functioning in exactly the same way within every individual.

        2: We know the psychological homogeneity assumption can’t be true because the human brain is genetically underdetermined, shaped by natural selection pressures to continue evolving somatically (e.g., non-genetically) within each individual by variously modifying, suppressing, combining, and flexibly deploying its vast array of psychological capabilities on an as-needed basis in response to the adaptive demands and rapidly changing contingencies of their every everyday lives.

        There are compelling reasons to believe that most psychologists (and social scientists more generally) (1) are unaware of their methodological reliance on the psychological homogeneity assumption, (2) think of homogeneity exclusively as a statistical concept about the distributional properties of aggregate data, and (3) therefore mistakenly assume that it’s just another one of those simplifying statistical assumptions that are robust to violations and can often be ignored or relaxed with impunity. Moreover, judging from the empirical literature, there is no evidence that the statistician-consultants and -collaborators of these psychologists have disabused them of this conflation.

        I understand that psychologists are ultimately responsible for whatever assumptions they adopt, statistical and otherwise. But what about the statisticians who advise and assist them? Isn’t there some point at which they have an ethical obligation to question or challenge such a preposterous assumption by educating them about the difference between statistical and substantive assumptions?

        I can’t squint hard enough to see grey on this issue, although I confess to being at a loss for how to distribute the blame.

      • The issue reminds me of Wendy’s classic 1984 “Parts in parts” commercial (https://youtu.be/qu9aPZIHI00) in which a server behind the counter (presumably at McDonald’s) responds to a customer’s question about what chicken parts go into a chicken nugget: “Different parts. Parts is parts … all the parts are crammed into one big part, and then the one big part is cut up into little pieces parts, and parts is parts.”

  2. I have never understood the attraction of gambling.

    I once worked with a lawyer (an excellent litigator) who gambled often. He’d drive to NJ and drop 10K or pickup 2K regularly.

    Once, at a moment when it seemed appropriate, I asked him why he enjoyed it?

    He replied something along the lines of “In my work life I have to concentrate and try to control everything I can. When I gamble, I can just relax, watch, and enjoy the outcome. It’s a total change of pace and experience.”

    That would not work for me. I walk through casinos without the slightest interest in playing.

    Bob76

    • I have some interest in sports betting, in the sense that if I knew of a model that would lead to consistent slow wins I would be interested in utilizing it to make money. There the skill in prediction matters. But I have ZERO interest in rigged games like craps or video poker or slots and such… Less than zero, they make me nauseated to watch, a literal visceral aversion.

  3. “On the other hand, there’s a clear motivation to cater to addicts and get them to spend more. No easy answers. I guess this is just a special case of a general problem of our society of abundance.”

    I don’t think issue is abundance. I think the issue is that our society tolerates the commercial exploitation of compulsive behaviors. Think about alcohol and tobacco. Major industries have been built on this lucrative, predatory business model. The food industry has moved in the same direction more recently.

    • I agree with Clyde. It is not a side effect of “abundance”. There were degenerate gamblers, alcohols and tobacco addicts during the Great Depression or any other time of non-abundance you care to name over the past couple centuries. It’s a product of the unfortunate bits hardwiring that leave many people prone to addiction, played upon for profit by industries which spring up for only that purpose.

      • By “degenerate”, I assume you mean that addicts collapse into some kind of singularity, since otherwise I’m not sure what you intend by using that term.

        • I was using “degenerate gambler” in the colloquial sense of someone whose gambling crosses the line into behavior that is self-destructive rather than being a harmless game or recreation. Perhaps that idiom is not as widely used or known as I imagined.

        • Thanks for the clarification! My experience with the word “degenerate” is with the mathematical sense and with a strongly pejorative (not meant as a joke) sense, so I assumed there was something I was missing.

          But I’d also never heard the term “vig” before it came up on this blog, so clearly there is a lot of gambling-adjacent terminology I have never encountered.

        • I thought a “degenerate gambler” was specifically someone who had already blown all their life savings, and kept gambling with whatever little money they could scrape up.

      • “played upon for profit by industries which spring up for only that purpose.”

        Outside of tobacco, can you name one industry that caters only to addicts? Food? Model glue? Paint? Retail gasoline? Alcohol? Gambling? Pot?

        It’s funny you say that because even very recently some “advocates” have been demanding that hard drugs be legalized to “destigmatize” them. So…how will they get on the shelf and be available and destigmatized if no company makes them? :) “Advocates” are also pushing hard to legalize dope and we’re moving rapidly toward full legalization. While I support this legalization only because use is so widespread already, I’d hardly recommend its use. Even when I was in my early 20s working my way through school I met dopeheads my age that were barely comprehensible. Smoking dope every day destroys people’s brains. But I guess we’ll figure that out soon enough. that being said, users want to use, and they want to use pretty badly!

        • I don’t think even Tobacco caters ONLY to addicts. But certainly Alcohol sells a very LARGE fraction of it’s total sales to the 2-5% of the country that are addicts. These people carefully monitor their intake, drinking say 15 servings each night. A typical moderate intake is 0-4 servings per night with an average of say 1.5 so the hard drinkers drink ~10x what the moderate drinkers drink. The moderate drinkers are like 30% of the population. Let’s call the hard drinkers 3% but they drink 10x what the 30% do, so figure on the order of 50% of all alcohol sold is consumed by the 3%

        • “50% of all alcohol sold is consumed by the 3%”

          No, I don’t think this is quite correct–your estimates are a bit inflated. The top 10% of drinkers account for ~50% of alcohol sales. https://pubmed.ncbi.nlm.nih.gov/17651465/

          I also don’t agree that only 3% of the country are alcoholics. This number is about 10-13%. https://worldpopulationreview.com/country-rankings/alcoholism-by-country

          I also don’t agree that addict drinkers “carefully monitoring their intake” either, nor do I agree that addicts consume 15 servings *per night*. I think this may be closer to 10 servings per night (note, heavy drinking is usually defined as 4-5 servings per night).

          https://www.washingtonpost.com/news/wonk/wp/2014/09/25/think-you-drink-a-lot-this-chart-will-tell-you/

          I do think your larger point is taken: a generally small fraction of the population consumes a relatively larger proportion of all alcohol (Pareto rule).

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