Crucial Concept, Terrible Name

First, some housekeeping. Congratulations to Simon Young on his recent interview with Isai Scheinberg, and subsequent efforts to support his induction to the Poker Hall of Fame. Both excellent articles about a truly great man.

Secondly, thanks to Baard Dahl for pointing out this Wired article that pretty much confirms all of the suspicions and allegations I made in this blog about Twitch slot streamers. Now to business!


Take two rats and give them cute alphabetically convenient names. Let’s go with Archie and Bryan. Now assign each one a food machine that has a manual release mechanism. Rats aren’t very thumb-y, so let’s do them a favour and use a pedal.

Archie’s machine releases a tasty pellet every five pedal-pushes, and Bryan’s randomly releases a morsel one fifth of the time it is pressed. Which rat do you think eats the most?

On average, they’re both getting fed at the same rate, so you’d think Arch and Bry would plumpen at a similar pace. Not so.

Lab studies have found repeatedly that Bryan will go into all-you-can-eat-buffet mode. He’ll gorge until he can barely move.  Archie will get bored soon after his hunger is extinguished. This is a textbook example of a Variable Ratio Reward Schedule (VRRS).

Now obviously the ‘rat food machine’ scenario is a bit like gambling. You don’t need to be switched on to spot a clumsy metaphor about my old nemesis, the slot machine. While that is certainly true, it’s missing the bigger picture.

All forms of gambling rely on the VRRS mechanism. It underpins everything. In short, it is doing something when the outcome is unknown. And you can find it in lots of other places too.

I first met VRRSs years ago in a videogame experiment. Blizzard, the clever people behind World of Warcraft, wanted to work out the best way to keep people motivated in the early stages of the game. For the most part, that involves levelling up your character by killing innocent defenceless sheep.

In the one condition, a player would improve for every ten lambs slaughtered (like Archie). In another, the player had a 10% chance of improving after any muttonous murder (like Bryan).

With thousands of players on their servers every day, the data came in quickly, and the results were clear cut. Players progressing every tenth sheep became demotivated and were more likely to give up on the game. Those facing the uncertainty that the next sheep could make a difference stuck at the task much longer.

It turns out predictability isn’t that fun. The first nine woolly corpses offered a joyless challenge – simply something that had to be done, like work. The tenth butchered baa-baa might offer some satisfaction for a job completed, but no serendipity. You knew the reward was coming and had even come to expect it.

In the variable version, you learn to anticipate a non-success because it is 90% likely. So when the result does go your way, you get a little reinforcing shot of dopamine. You want to feel it again, so you keep on going. Every kill matters.

I recently came across a totally unrelated and unexpected example in the How I Built This podcast; Ben and Jerry’s ice cream.

In those early days, Jerry made the ice cream and Ben did the product testing. Incredibly, Ben Cohen is anosmic – he has a very poor sense of taste and smell. That should be a huge obstacle, but he credits the condition as the reason for their success.

For him it was about textures, and for him to experience interesting mouthfeel, Jerry had to include noticeable chunks. The use of big bits was revolutionary because it meant every spoonful was an event.

The most likely outcome is that you get a pleasant creamy tongueload of ice cream, but every so often you’re going to hit the sensory jackpot. When you bite down on a satisfying chunk of cookie dough, you get that extra flood of pleasure, and you’re going to have a hard time stopping before you hit the bottom of the tub.

Compare that to a standard flavoured ice cream, which has been blended to be uniform/consistent. Like Archie the rodent, you probably give up after you’ve had a few mouthfuls because you’ve got the idea and there are diminishing returns in consuming more of the same.

How about a movie example? As it’s Halloween, imagine a horror film where you know to expect a fright every fifteen minutes. It just isn’t as scary when you know something is coming. A really thrilling experience always keeps you on the edge of your seat. You don’t know how many frights there will be or when they will strike, so each is accompanied by a dopamine rush. That’s why people watch those bloody awful things.

And before I tediously bring this back to gambling, here are a couple of personal examples…

I love stand-up comedy, but I really don’t enjoy one-liner comics. Not for very long anyway. Partly because I have a deep aversion to puns and dad jokes, but also because a constant stream of quickfire gags leaves no room for unpredictability. There is no shock or surprise value, and the laughs are correspondingly mediocre.

The most obvious example of this is Tim Vine. He has written great jokes and was excellent on Taskmaster, but when I saw him live at Wycombe Town Hall he appeared genuinely shocked to get an encore. I think his audiences get burned out by the repetitious rhythm of the performance. There isn’t the rollercoaster variability that comes with a story teller.

Finally, and perhaps most weirdly, I embrace the power of VRRSs when I order KFC. I usually get chicken on the bone, and that opens the door to randomness. The meal comes with two pieces of chicken, but there are five bird parts of varying deliciousness, and I don’t know which ones I’m going to get.

I used to ask for specific pieces, but now I throw the fast-food dice and just see what happens. Typically, I’m greeted with either a measly wing or a flavourless crown. But on those occasions where the stars align and I get the dream drumstick & thigh combo, I experience a hit of fleeting joy. Yes, I intentionally tolerate lesser meals so that I can feel that small private high.

So why am I even talking about this stuff?

I worked in the industry for years and I never really understood this fundamental building block. Whether you’re a punter or the house, it is worth knowing what is happening under the hood and why it is effective.

It’s only then that you can come to understand legitimate, necessary uses of VRRSs, and when it is being used cynically to squeeze more money from customers. Most notably, you can see it in loyalty programs and gamification layers, where companies are randomising rewards that should be reliable and transparent. Stop it.

I also thought it would be fun to show how the VRRS pervades life outside of gambling. The same thing that can make gambling subconsciously appealing and addictive might be the same thing that is driving your behaviour elsewhere.

In some aspect of your life, you are probably a gambler and don’t even know it.   

Bobby’s Bets

I’ve nursed the same £20 account balance since the Euros, but I just placed the last £5 on Adam Zampa to take the most wickets at the T20 cricket world cup. The rest was blown on shonky football bets. Looks like I’ll have to reload soon.

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