Blackjack and the Impact of Regret
Blackjack is a card game in which players compete against the dealer. To win the game, a player must draw a hand value that exceeds the dealer’s while maintaining a total higher than 21. This objective is simple and is the reason that the game has become so popular. There are a few misconceptions about what the game is actually about but beating the dealer remains the main goal.
The game begins with players placing bets on the table with chips. Each blackjack table has minimum and maximum betting limits, and the cards are dealt after the bets have been placed. The dealer deals each player and themselves two cards, one face up and the other face down. If the dealer’s up card is an ace, she offers insurance to all players. If the dealer has a ten underneath, she has a blackjack and pays all insurance wagers at 2 to 1 odds. If the dealer does not have a blackjack, she collects all initial bets and continues the hand.
Side bets are also common in blackjack. These bets are made in addition to the player’s original bet and can include anything from a bet on whether the dealer will bust or get a blackjack to a bet that a particular player will win. These bets can be lucrative for those who know how to use them but they are not a part of the basic strategy.
A key feature of blackjack that makes it an attractive setting for analyzing regret is the fact that bets are placed before strategic decisions are made. This means that a player’s expected regret is largely determined by their course of action and is independent of their level of risk aversion.
Once a player has decided on their course of action, they cannot change their mind without forfeiting the money that they have already bet. This is why it is important to understand the impact of regret avoidance and omission bias before playing blackjack.
Studies have shown that confidence in blackjack strategies correlates with a number of psychological and behavioral consequences, including outcome expectations, anxiety levels, risk taking, and information search and consideration. In two studies, we manipulated participants’ confidence and found that greater unjustified confidence led to larger bets (a measure of risk taking) and less willingness to consider advice designed to improve their play. This finding has implications that go well beyond blackjack and could apply to situations in which the public is provided with scientific information, such as with home radon testing or financial education. The raw data for these studies are available to interested researchers upon request from the authors. This research was supported by the National Science Foundation under grant numbers 1045177 and 1117340. The Wake Forest Institutional Review Board approved the studies involving human participants. All participants gave written informed consent before participating in the study.
