Casino – The Sunk Cost Fallacy at Work

A casino is not what you might imagine. Sure, there is still some seedy backroom gambling parlors where people get up to no good but the vast majority of casinos are clean, professional, and offer a safe environment in which you can eat, drink free cocktails, watch live shows or closed-circuit broadcasts and gamble on the outcome of a game of chance.

They’re designed to be visually stimulating with flashing lights, bright colors and movement creating an atmosphere of excitement and energy that makes players feel like they’re part of the action. They’re also designed to make winning money seem easy, using tricks such as ‘near wins’ to trick the brain into thinking they are almost there, encouraging them to keep betting, often causing them to spend more money than they originally intended.

Lastly, casinos are designed to offer players rewards programs that see them earn points on every dollar they play even if they lose, which can offset the sting of losing bets and encourage continued spending. This is an example of the sunk cost fallacy at work.

Casino is a great movie that showcases the pitfalls of gambling and the power of addiction. It’s a classic crime drama with a terrific cast led by Robert De Niro as Ace Rothstein and Joe Pesci as his mobster sidekick Nicky Santoro. Their dynamic is one of the reasons why this film is so compelling. It’s worth watching if you want to better understand how casinos are designed to lead you to spend more than you planned.

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Cape Town, South Africa