1) Hazard gambling Policy to decrease negative impact of gambling

„Gambling, the practice or activity of betting : the practice of risking money or other stakes in a game or
bet“ as defined by Merriem-webster is a complex issue. Modern gambling, with the introduction to
internet takes many forms. Not all gambling is done directly with money. Between the step of betting
and placing money is a system designed to confuse the customer, circumvent laws or both.

As stated in „Study on online gambling and adequate measures for the protection of consumers of
gambling services“, it’s simple heuristics that drive human behavior to make shortcut’s in decision
making, which can prove detrimental to the management of personal finances. The paper states exactly
this „Some of the most well-known and classical heuristics and biases (i.e. loss aversion, availability,
representativeness) are the source of gambling specific biases.“ That is essentially identical to gambling
in person. What is different however are the means to induce such biases in the player.

For example, the online player is more isolated in his decision making than a live player, usually part of a
group. This fact allows games to nudge the player into economically untrue conclusion regarding the
probability of winning, the actual value of the reward or simply to make a more valuable decision more
easily. This process can be automated and connected to another service to appear more valuable,
honest or probable than it actually is. One way for the game to appear more valuable than it is, is to
offer a false win-win scenario, in case the prize is not directly money (this way, actual value of the prize
can be misunderstood). The player is always guaranteed to win, but usually not the prize he wants to
win, which is sought after and has a statistically low drop rate. Perhaps the player has a diminished
sense of loss, which would explain high continuity of such gambling and addiction. This is also essentially
a confirmation bias (the player knows he’s going to win).

Another staple of online gambling is to further reduce loss aversion by making the player feel like they
are not spending „money“ but rather a lesser currency, which has been already checked out. This
principle has been widely used by casinos in real space as well, to a great effect. To mitigate this effect,
regurarly reminding the player, how this currency translates to real earnable money can help defeat the
illusion.

To combat these biases, the player should be confronted with facts resisting heuristics. One way to help
the matter is transparency. The odds of winning should be always known. Another matter is to make
sure that the player knows that the activity itself is gambling. Such issue has been globally disputed and
recently a hot topic as global companies primarily focused on gaming and other forms of digital play
allegedly disguised gambling services into their games to make younger people addicted and make them
spend more money. To limit similar practices is more based on an ethical principle, but nonetheless,
confronting the player with gambling warning should provoke more critical thinking as it is pretty much a
use of Framing.

The final step of online gambling restriction should take the form of service availability. As the service is
usually easy to use and provides instant satisfaction it can, similarly to a drug, make the user addicted to
process of use itself. Regulation based on time restriction could be viewed as oppressive, but from a
psychological standpoint, it’s not unsimilar to closing of a bar and leading out a few problematic
customers.
 2) Motivating people to save more for pension

Saving for pension is a very personal choice tied to self-control over instant and postponed gratification.
It is economic and rational to do so, but the struggle with self-control i viewed as great enough, to need
a behavioral support. Many financial savings programs have tried to offer that support. Looking at the
most well known USA program, the 401(k), it’s solution is debatably simple, but quite effective. If it
lacked the protection written in law clausules, however, it wouldn’t probably be that effective.

Sure, the most effective tool it utilizes is probably the famous default contribution rate (which has it’s
own downsides, regarding the slow increase of contribution afterwards), but if it wasn’t for the tax
exemption and debt protection, there could be a significantly lower possibility of participation.

So, how to motivate people to spend more, while not altering current laws? Knowing, how people tend
to think, regarding their income, they can be nudged to save more. The confirmation bias many
employees have, about the possibility of spending dissuaded them from even trying. They convinced
themselves they need the money now and may spend that money on unnecessary expenses, or micro-
expenses (repeated spending of little amounts of money). To combat similar behavior, it’s been proven
effective to defeat this thinking with said default contribution spending rate. However, a less invasive
way to defeat the false sense of savings inability could be emulation of spending inside the company.

Theoretically, this bias stops people from saving, but not spending, even though they have the money to
do so, but choose not to. If saving can be framed as spending in exchange for minor goods or services, it
could be a more efficient way of recruiting employees for savings plans. Yes, it can be seen as ethically
questionable. Nevertheless, if the practice is transparent, disclosing that the amount spend (Or part of
the amount, realistically) is transferred to a savings account to be checked out later can be percieved as
fair. For example, imagine a company managed gym with a set membership fee which splits off an
amount of money per payment for a savings program.

The second most guilty bias is perhaps the anchoring of one‘s finances in an undesirable position
towards saving. The inability to change the managment of income is likely caused by high perceived cost
invested into decision making and obtaing of critical information. Additionally the endowment effect
comes into play, as the current status is more valued than a possible complication which may arise from
incorrect handling of savings contribution.

The solution for suppression of such biases is mostly bound to administrative support, regarding
decision making and financial plan distribution. Easing of a burden laid onto a metaphorical back of an
employee when seeking a better savings approach, making the change feel simple and safe, simply put.

Most existing savings programs already provide these solutions, as it is a matter of design to make the
enrollment as approachable as possible.
Sources:

[1] Codagnone, C. (2014). Study on online gambling and adequate measures for the
protection of consumers of gambling services. LSE. Retrieved from
[Link]
native

[2] Gaming loot boxes: What happened when Belgium banned them? (2019, September 12).
BBC. Retrieved from [Link]

[3] Madrian, B. C., & Shea, D. F. (2001). The power of suggestion: Inertia in 401(k)
participation and savings behavior. 116(4). Retrieved from
[Link]

[4] Thaler, R. H. (2015). Misbehaving: The making of behavioral economics. New York:
W.W. Norton & Company.