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I’m a pretty rational person. Maybe that’s why I don’t bet often (I can count my bets on one hand...)

But whenever I have bet, I usually bet against what I want to happen (e.g. my favourite football team winning), so I get some “compensation” for something I didn’t want to happen.

I have Googled this phenomenon quite a bit but not found any info (problem is, you mostly reach betting sites!)

Is there any psychological research into “betting against what you want, to gain “compensation””?

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  • $\begingroup$ BTW, I totally understand if your site needs to be more objective: can rewrite in third person instead... $\endgroup$ May 19 at 17:37
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    $\begingroup$ I always thought this was just called insurance. In industry, hedging is often used as a form of insurance - for example, a company that spends a lot of money on fuel (eg, a freighter) may be concerned with future oil price increases, so they will enter into a contract to guarantee those future oil prices (the downside being overpaying if they don't increase). This is also where the term hedge-fund comes from. $\endgroup$
    – Arnon Weinberg
    May 19 at 18:23
  • $\begingroup$ So, this is just “boring betting” then. Less risk... $\endgroup$ May 19 at 18:31
  • $\begingroup$ However, I could have just not bet: by betting on an outcome I don’t want, I “force” some result. Insurers would presumably be too level headed to do this. $\endgroup$ May 19 at 18:34
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This is related to the concept of utility of outcomes, as well as the idea of hedging in gambling. When you have a favorite sports team that you want to win, it's very similar to implicitly placing an emotional "bet" - if your team wins, you gain positive utility, while if they lose, you get negative utility. By betting against your desired outcome, you are hedging the bet, which is a way of betting on both outcomes such that you can guarantee a profit, or at least minimize your losses.

By betting for your favorite team, you have an all-or-nothing outcome - you'll either be happy with the outcome and win cash (both good), or be unhappy with the outcome and lose cash (both bad). By betting against your favorite team and hedging your bet, you'll have a more moderate outcome no matter what - you'll either be unhappy but win cash, or be happy and lose cash. Whether hedging a bet is worthwhile will come down to your level of risk aversion, as well as the utility you assign to the cash, a win, or a loss.

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    $\begingroup$ Thanks, NH. I finally started to find info after Googling “emotional hedge bet”. $\endgroup$ May 19 at 18:15
  • $\begingroup$ Absolutely fascinating area (to a layman...) $\endgroup$ May 19 at 18:17
  • $\begingroup$ These pieces of “advice” seem pertinent: 1) Only make the Emotional Hedge when your team is the underdog 2) Know your limits 3) Tell people about your plans $\endgroup$ May 19 at 18:19

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