Commitment Effect In Gambling | The Sunk Cost Fallacy

The commitment effect is a cognitive bias that occurs when people feel an obligation to follow through on a decision, even if doing so is not in their best interests. The effect is especially strong when the individual has invested a lot of time and effort into the decision-making process.

The commitment effect impacts gamblers and sports bettors in more than one way.


Examples of the Commitment Effect

The commitment effect is common across various aspects of our everyday lives. For example:

  • Relationships: sticking by toxic people on a sentimental basis, rather than building healthy friendships with new people
  • Education: persisting with a university course that you’re struggling with, despite there being a more suitable alternative
  • Employment: staying loyal to a company that doesn’t value your devotion, rather than moving onto a company that continually rewards staff
  • Home renovations: opting to stick with incompetent/rogue builders, while other highly recommended tradespeople are available
  • Subscriptions: continuing to pay a monthly Netflix or Amazon Prime subscription despite rarely using them
  • Health: continuing to invest in a diet/weight loss plans which aren’t working, even though more effective/economical methods exist.

Essentially the commitment effect means that we’re inclined to disregard things that undermine an idea or decision we’ve already made, when making a change is the better choice.


The Sunk Cost Fallacy

The commitment effect can often be explained by the notion of the sunk cost fallacy.

The sunk cost fallacy is the idea that individuals are more likely to continue investing in something that they have already heavily invested in, regardless of the potential outcome. This is because people are more inclined to find a way to justify their previous actions than to feel as though they have wasted their money and/or time.

Take the case of ‘Education’ (listed above) as an example.

Some students will persist with a course that they’re struggling with, or aren’t enjoying, in order to justify the sunk costs of time and money. These students may reason that their course provides “excellent career prospects” with a potentially “high salary”, and that switching courses would be “expensive” and “inconvenient”. These students will stay committed despite obvious drawbacks, such as:

  • If the course isn’t suited to their skillset, they’re unlikely achieve a high grade
  • If the subject matter isn’t enjoyable, then it’s unlikely to relate to their chosen career path, or the one they’re most likely to thrive in.

The sunk cost fallacy impacts sports bettors in the same manner. Once a bettor has invested money, time, effort — even high levels of expectation — it’s never easy to walk away at a loss. More on this in the next section.


Commitment Effect In Sports Betting

Sports bettors are financially and emotionally committed to their wagers. Here’s how these two factors contribute to the commitment effect.

Financial Commitment

Sports bettors make a financial commitment whenever they place a bet. But where does it stop?

There’s a well-recognised trend among recreational gamblers: they will continue betting in an attempt to recoup their losses, even when it’s clear that they aren’t going to win in the long-run. This phenomenon is often seen at slot machines, where players will continually put in money after experiencing losses, in the hopes of winning back their original investment. It’s the sunk cost fallacy at play.

Gamblers often feel that cutting their losses would mean the investment would’ve “all been for nothing”. The problem is, there’s no guarantee of ever clawing back those losses — especially while the bookmakers/casinos have the edge. So losses are more likely to compound the more the bettor commits.

The commitment effect is a dangerous psychological force that can lead to individuals increasing their stakes and spending much more money than they originally intended to. It especially impacts those new to betting, not fully aware of the financial risks associated with compulsive gambling.

Emotional Commitment

Sports bettors often feel an emotional commitment to the selection process they use to make betting decisions. After all this system/strategy/methodology is what they’re putting their faith into.

Bet selection processes vary in complexity from superstition, to random choice, to sports fandom, to following tipsters, to formulating a highly complex mathematical model. Very few selection methods work in the long-run, and hence bettors are regularly faced with a difficult choice: hold faith or abandon ship.

Take tipster services as an example. Suppose a bettor took the leap of faith on a service, invested in the hefty subscription fee, religiously followed all recommended selections over a period of several months — but ultimately failed to turn a profit. Should the bettor ignore certain reg flags and continue to follow the process in hopes that it’ll turn around previous results? Or simply cut losses and try a fresh approach?

The best choice might sound obvious to an outsider, but the emotional aspect of the commitment effect is so strong that some gamblers will not follow any alternative path until it’s too late. Understandably, it’s not easy to completely change perspective — especially if doing so appears to undermine everything you’ve believed in, or worked towards.


How To Avoid The Commitment Effect In Gambling

The commitment effect can be managed with discipline, self-control and a little education. I recommend that you:

  • Set deposit limits. Set aside an amount that you’re happy to lose. See the money as ‘spent’ the moment you deposit to the bookmaker, and any profit you make as a bonus.
  • Take regular breaks. It is important to take breaks while gambling to avoid betting compulsively. Taking a step back can help you to make rational choices going forward.
  • Only gamble for fun. While every bettor wants to succeed, many won’t. Therefore gambling should at the very least be enjoyable! You’ve heard the adverts: “when the fun stops, stop”.
  • Educate yourself. You can learn more on the risks involved in gambling on sports and casinos by checking out the articles in the Fundamentals section of this site. If you’re conscious of the dangers of the commitment effect, you’re less likely to think twice.
  • Be open-minded. Actively look for evidence that supports views which oppose those you’ve taken, rather than only seeking evidence that backs them up. That way you’re less inclined to “lock on” to one mode of thinking.


I think the commitment effect is one of the hardest biases to prevent, as it can lead even the most determined bettors astray. Furthermore, it can financially punish those with the inclination to make the most of bad situations — which is often viewed as admirable outside of the gambling world. So a shift in mindset is required; you need to learn the ability to let go.

Toby @ Punter2Pro
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