Lunar New Year – it’s a risky business!
Many people around the region are just getting over the Lunar New Year celebrations. No doubt many will have had a little too much to eat and drink. If that wasn’t enough, some might be having a financial hangover too.
Gambling can be a big part of Lunar New Year celebrations with a wide range of dice and card games played around the region. Some of the most popular include Hoo Hey How (魚蝦蟹) in China or “Tiến lên” in Vietnam.
Behavioural Science can help us better understand the choice dynamics around gambling. Central to how we gamble is how we perceive risk.
Research by Kahneman and Tversky (1979) points towards two risk strategies in gambling:
Players doing badly take huge risks, hoping to avoid defeat
Players doing well minimise risk, hoping to consolidate their gains
Of course, this is hardly rational. But as with so many decisions we make, we are easily nudged by a range of factors.
Many decisions in life are like gambling – we are always trading off costs, benefits and risk. Think about the choices to take insurance or to accept a new drug!
For commercial marketers seeking to influence this dynamic, understanding how people respond to risk can be the foundation for segmentation and more targeted strategies.
For those who feel they are more secure (in terms of wealth or health), communicate your value proposition as a solution that reduces the risk of losing existing assets.
For those who feel they do not have ‘much’ (in terms of assets or even health), the objective could focus on communicating the significance of existing assets AND incorporating rewards to celebrate the small wins (Amabile & Kramer, 2011).