Can gambling provide an explanation for both Brexit and Trump?

Many are losing confidence in the predictions made by analysts and experts that are hired to predict the outcome of big elections and make assumptions based off of polls. It has not been a winning year for the experts, who guessed both the Brexit decision and the Trump nomination incorrectly.

The International Cognition and Culture Institute released an article that might shed some light on how these risky decisions managed to pass a popular vote, even when analysts didn’t think they stood a chance. It is described by a theory called “prospect theory”, which might offer some solid reasoning behind the people’s decision to vote as they have.

Prospect theory is the idea that the prospect of something great happening outweighs a lesser certain reward. For example, being given the choice of being handed $50 or flipping a coin to receive $200, almost all participants would take the safe and certain choice of $50. People tend to make less risky decisions because it eliminates uncertainty and prevents the fear of the unknown. However, given a circumstance where people feel as if they have lost something or are in desperation, they are very likely to take the riskier route.

In both the Brexit vote and the 2016 presidential election a majority of voters felt that they had lost something, and that was the key to gaining support. Just take a look at Trump’s motto of “Make America Great Again”, where he continually told the American people that America is no longer great and they have lost the country they once held dear. Even though Trump was the greater risk factor, this feeling was enough to persuade a majority of the country to vote in his favor.

This is the same principle that is used in gambling. The more people lose the more they want to play and make riskier bets in order to at least recover their losses. In fact, the thought of gaining back lost money is more of an incentive than trying to profit at the casino. It is much easier for a player to walk away while they are ahead than it is for a player to walk away while they are behind.

Beyond that, we all know that a lot of people don’t even vote. There needs to be some sort of energizing factor to get people to act. A person is more likely to vote if they feel they are gaining something rather than just feeling like they are maintaining something. This is likely why the United States will almost never have a president of the same party in office for more than three elections. Change is always more motivating than keeping the status quo.

Operators continually take advantage of the biological hard-wiring that makes gamblers feel like they need to recover losses so they don’t feel defeated by the casino. Special offers, such as rebates, get offered to push players to continue playing.