How can the illusion of knowledge interfere with your betting habits?
We live in the era of knowledge and of course we know that knowledge is power! Does this hold true for the world of sports betting? Well, yes and no! And how is that? Knowledge is a significant plus, but it can sometimes lead to misjudgements stemming from overconfidence or misuse of what we know! In a broad sense, this has to do with the “illusion of knowledge”, which is the belief that one knows much more than s/he actually does and consequently that has greater understanding of a subject/theme than s/he actually has. The illusion of knowledge is a form of cognitive bias that often interferes with people’s ability to make more effective and wiser judgements and evaluations in certain circumstances, particularly when the application and utilization of knowledge is in fact critical.
Punters often engage into a tight process of collecting data, gathering stats and past records for players and teams, generating information on the weather and other external conditions in their attempt to increase their knowledge and enhance their ability to make more accurate predictions of events and outcomes. Then, they go through bookmakers’ reviews to further enrich their knowledge on betting companies and they end up making perceived rational, cognitive decisions that frequently lead to mistakes, particularly because knowledge can interfere with their assessments and judgements.
Recognizing the ways in which such an interference occurs and understanding the basic sources of the illusion of knowledge can be really helpful and insightful in assisting you to achieve some form of balance of what you know, what you think you know and how you should utilize your cognition in sports betting. For example, getting to realize how ‘knowing’ specifics and details about a game can indeed shape your opinion and belief about this game and therefore your prediction of its outcome- even if the knowledge has no predictive validity- is really enlightening.
Illusion of knowledge and biases
The illusion of knowledge is ‘known’ to be associated with three recognized biases, which are highly relevant with sports betting.
First, it is the recency bias. This has to do with taking into consideration as our explicit knowledge what we can more easily recall due to its recency. Simply enough, our knowledge upon something is largely shaped by our recollection of the most recent information about it, while neglecting past information and/or knowledge. In sports betting this draws on the readily available information on a football team’s performance for example, where due to the fact that it might have shone in the last tournament, we believe that we have sufficient knowledge to make judgements and predictions for its present performance despite the fact that this team may have been a suboptimal player in the past few years.
A second form of bias has to do with the key tendency of people to search for information and take as acceptable new knowledge what confirms their predisposition or their already formed beliefs. This is the confirmatory bias and it is a very frequent source of poor judgements and mistakes in sports betting. When a bettor believes that s/he has sufficient knowledge over a tennis player’s stats, style, performance, strengths and weaknesses and has formed a belief about this player – a belief that informs his/her predictions over the player’s forthcoming game- then this bettor is very likely to pay attention to information that confirms his/her existing beliefs and ignore information that contradicts his/her beliefs. But such information might in reality have far greater predictive validity for the player’s performance in the upcoming match and ignoring it can hamper the bettor’s ability to make more accurate forecasting and so end up losing money.
A third bias that is also highly relevant in sports betting is the well-known hindsight bias. All too frequently, punters look back at past events and falsely believe that the events’ outcomes were in fact predictable and that should they have the information and knowledge available, they could have actually accurately predicted the results. They see patterns and information as being clearly pointing towards an outcome and as such they treat knowledge as a determinant of accuracy in prediction. But this means that there is a great overconfidence and overestimation of their ability to make predictions and subsequently to place their bets on outcomes, for which the predictive value is in fact weak. Punters may well develop the perception that they can indeed make accurate forecasts and as such jeopardize their money.
Be conscious of the illusion of knowledge
Regular bettors and novice players can really benefit from acknowledging the illusion of knowledge and understanding the different biases and how these can result in betting mistakes and riskful decisions. Of course it is not easy to overcome biases and break free from deep-rooted assumptions and beliefs of knowing, but it is often wise to step back and think twice before developing a betting strategy, placing a bet or even forming a predisposition and belief over an event.