Do you always dream about winning a million dollars? You’ve probably got a bucket list of things you’d buy right away and you’ve imagined yourself jumping up and down thinking about where the nearest bottle of champagne is.

It sounds awesome right?

What about the reverse and losing a million dollars. You may not want to picture yourself losing one million dollars but the theory of loss aversion would see you take losing the million dollars a lot harder than the joy of winning a million.

The loss aversion theorem:  refers to people’s tendency to prefer avoiding losses to acquiring equivalent gains: it’s better to not lose $5 than to find $5.

How does this apply to sports betting? Let’s say you have made a bet before the match that is almost definitely going to be a loss at half time. You could make a strategic bet at half time that is going to minimize your losses but may

This is also known as hedging your bets.

Example: Let’s say you had a $100 bet on the LA Lakers to win head to head against OKC. They were paying reasonable odds ($2 so you may win $100) but you felt like they were going to win so you placed a bet on the Lakers which is outside your normal comfort zone (you normally bet $10).

At half time the Lakers are in fact down 64-41. Not an insurmountable difference but you believe you’ll lose your bet 99 times out of 100 from here.

When you get a text with the odds at half time, you might like to place a bet on OKC now.

This way you’re not going to lose all $100 and that’s okay as that would hurt badly. If the Lakers did come back to win the game, that would be slightly frustrating but given you this happens only 1% of the time as far as you believe the net result is a better mood.

You won’t want to hedge your bets all the time as it’s not necessarily a winning strategy but as someone aware of loss aversion, this is a great way to make sure you don’t feel too horrible at the end of the game.

There is a cross over to those who actually play sport at a professional level. The Ryder Cup is an event that plays high on emotions. Jim Furyk and Hunter Mahan are two players that have experienced both the highs and lows of being involved in decisive points in the event and talk about the feeling of the loss compared too the win.

“Losing hurts worse than winning feels good,” – Jim Furyk

“The high of winning comes and goes. You win, it’s great, you move on. But you remember your losses…” – Hunter Mahan

Loss aversion is an interesting theory that gets a lot more complicated than our short explanation here. Do you take losses harder than the enjoyment from your victories?

If so, you may want to make half time bets that’ll help you minimize your losses from bets that are going to be almost certain losers that would leave your hurting more than they perhaps should.