Giuseppe A. Veltri, PhD

Study on measures for the protection of consumers of gambling services

PAF Responsible Gaming Summit29TH SEPTEMBER 2015

Background

Background on work for the Commission

• 2011 Call for a framework contract on behavioural studies

• LSE and Partners Consortium among the five selected contractors

• So far:– Study on tobacco labelling and packaging (two studies)– Study on Car labelling (C02 labels)– Study on online gambling and consumer protective measures– Study on online marketing and in app purchase for kids online– Study on environmental footprint labels

System 1 (fast) System 2 (slow)

Quick, automatic, no effort, no sense of voluntary controlContinuous construal of what is going on at any instant

Slow, effortful, attention to mental activities requiring itGood at cost/benefit analysis, but lazy and saddled by decision paralysis (cognitive overload)

Characteristics• Quick (Reflexive)• Heuristic based• Use shortcuts

Characteristics• Deliberate (Reflective)• Conscious• Rule-based

When it plays• When speed is critical• Avoid decision paralysis• When System 2 is lazy

or not activated (not worth, no energy, lack of awareness)

When it plays• May take over when

System 1 cannot process data

• May correct/override System 1 if effort shows that intuition or impulse is wrong

By David Plunkert in NYT 27/11/2011

Thinking fast and slow

Objectives and experiments

Measure the relative

effectiveness of existing and possible new

consumer protective measures

Laboratory experiment

(UK, N=522)

Test subjects behavioural and self-reported

responses to pre-gamble and in-gamble treatments

Online experiment

(7 countries, N=5997)

Test subjects behavioural and self-reported

responses to, and their choices with respect to, pre-gamble treatments

Design

LAB

ONLINE

Demographics and gambling

experience pre-treatmentquestionnaire

RANDOM

1 out of 8 Treatments

Post-treatmentQuestions 1

Gamble (≈ 20-30 spins)

Online panel (N=5997)

Filler task

Post-treatmentQuestions 2

Post-treatment questionnaire

Opt-out choice

Samples

• Laboratory experiment conducted at LSE Lab:– Convenience sample (N= 522) extracted from LSE Behavioural Lab Panel– The LSE Behavioural Lab Panel comprises some 3000 contacts, who have expressed

an interest in participating in paid research. The pool of subjects consists primarily of LSE students and staff, but also of individuals from surrounding universities

• Online Experiment:– Simple random sample (N=5997), with sampling error +/- 1.25% for overall data and

+3.53% for country-specific data

Multi-dimensional response variables

Scales measuring:• Emotional: • Valence: type• Arousal: intensity

• Fear / Anxiety

Scales measuring:• Recall of info• Cognitive depth

of processing

Behavioural measures• Time per bet• Amount per bet• Opt-in or opt-out• Continue betting

when experiment could be finished

Scale measuring:• Future intentions

Key ‘nudges’ we tested

Nudges Rationale Possibly de-biasing

Pictorial warning Elicitation of emotions; activate reflective thinking

Gambler’s fallacy, near-miss fallacy

Overconfidence task Instil doubts, activate reflective thinking

Overconfidence, illusion of control

Push pop up “You lose”

Stop hot cognition; activate reflective thinking

Gambler’s fallacy, near-miss fallacy, hot and cold hand streaks

Fixed monetary limit Power of defaults; inertia effect on betting decisions Entrapment

Self-defined Monetary limits

Mental Accounting; House money effect Entrapment

If they work we expected less and slower betting and higher self-reported responses for treated subjects compared to the control group

Laboratory experiment findings

Notation

Pre-gamble: behavioural measures

Pre-gamble: self-reported measures (PANAS)

Pre-gamble: self-reported measures (SAM)

In-gamble: behavioural measures

In-gamble: self-reported measures (PANAS)

Online experiment findings

Pre-gamble: behavioural measures

Conclusions

① Pre-gamble treatments can be deemed to be systematically not effective

– At least three of the pre-gamble treatments were expected to be more effective than what our findings shows (the two warnings and the overconfidence bias)

② For the other pre-gamble treatments ineffectiveness could be expected from a behavioural perspective (logos, terms & conditions, registration forms)

③ The registration form may have unintended effects and amount to over-regulation

④ In-gamble measures altering the flow between gamblers and machine are fairly effective in systematic ways

g.a.veltri@le.ac.uk

@gaveltri