Anatomy of a gamble.

• Position: Risk - Neurological reactions - Brief Article

Within about a quarter of a second after we see the outcome of a gamble, our brains have processed whether we've won or lost, according to a University of Michigan, Ann Arbor, study. Moreover, choices about the next wager made a few seconds after losses are riskier than those made after gains, providing an apparent neurological counterpart of the gambler's fallacy--the misguided belief that a win is bound to follow a string of losses.

Conducted by assistant professor of psychology William J. Gehring and doctoral student Adrian R. Willoughby, the study confirms the unsettling existence of neurological activity that quickly, automatically, and unconsciously evaluates the significance of choices we have made, then guides our subsequent decisionmaking. This has implications for many quick decisions beyond those made in gambling casinos, including choices routinely made by pilots responding to cockpit indicators, traders checking stock prices, and physicians, police officers, or firefighters faced with life-threatening emergencies.

"The findings suggest that, in many situations, our brains rush to judgment," indicates Gehring. "They rapidly evaluate whether events are good or bad, and this judgment influences how we react." While economists have tended to assume that people make rational decisions, psychologists have long recognized that human decisionmaking is often irrational. Still, Gehring says, he was surprised by how quickly the brain reacted to gain or loss--within 265 milliseconds of seeing the outcome of a decision--and by how strong the gain or loss influenced the next choice people made a few seconds later.

Gehring and Willoughby used a measure of the brain's electrical activity known as...