Commerce as Gambling

Examples of gambling are often used in explaining statistics, as they are the most common use of statistics in actual experience: a game is a situation in which the environment, equipment, and behaviors are tightly controlled to restrict the possible outcomes, such that probabilities can be calculated that purposefully ignore any factor that falls outside of the contrived events of the game.

That is, any outcome that results from the players acting in unexpected ways, equipment fails, or the environment changes is ignored – which is very much the same as statisticians approach the real world, only events in the real world cannot be replayed.  If a cargo ship sinks on a trip across the ocean, there is no “do-over” with a replacement ship and the amount wagered on its successful completion of the voyage is lost, regardless of whether the statisticians accounted for weather conditions.

There is a finicky distinction between betting and gambling: a bet is placed on an event that will occur regardless of whether a wager is involved and gambling is placing a bet on an event that is arranged for the sole purpose of being gambled upon.  (I sense this might be entirely incidental.)

It’s also mentioned in passing that we presume gambling to be done for financial gain, but it is also psychologically motivated: many individuals make proclamations of outcomes in order to flatter their own vanity, and wagering is merely a means to get someone else to pay attention to them.

It’s briefly mentioned that any affair in business is some form of bet or gamble that will profit the investor only if probability works out in his favor, though he his more able to act in ways that influence the outcome in his favor.

But at the same time it would be a mistake to extend the metaphor of “game” to any human action.   Most actions are not competitive, and do not aim at causing anyone to lose, but instead seek an improvement in conditions.   There are competitive situations where one may gain at the expense of another, but it is certainly not always the case.

The businessman makes money by supplying customers with goods they wish to acquire, and it is in the nature of transaction for each party to feel it has gained something it values more than what it gave in return.   There are swindlers whose approach to doing business with others involves deception, but this is not the typical mode of a business that has any desire for longevity – it must be supportive and cooperative with its customers to forge an ongoing relationship to sustain profitability.

There is also the sense of competition between firms to serve a limited market, but this is a misrepresentation of their actions:  each strives to serve the customer better than the other such that the customer chooses their product rather than the competitors.  When business competition is viewed as a contest and the customer a prize to be won (rather than a rational individual who chooses for himself), dysfunction results.