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Poker Player Behavior After Big Wins and Big Losses

Author

Listed:
  • Gary Smith

    (Department of Economics, Pomona College, Claremont, California 91711)

  • Michael Levere

    (Department of Economics, Pomona College, Claremont, California 91711)

  • Robert Kurtzman

    (Department of Economics, Pomona College, Claremont, California 91711)

Abstract

We find that experienced poker players typically change their style of play after winning or losing a big pot--most notably, playing less cautiously after a big loss, evidently hoping for lucky cards that will erase their loss. This finding is consistent with Kahneman and Tversky's (Kahneman, D., A. Tversky. 1979. Prospect theory: An analysis of decision under risk. Econometrica 47(2) 263-292) break-even hypothesis and suggests that when investors incur a large loss, it might be time to take a vacation or be monitored closely.

Suggested Citation

  • Gary Smith & Michael Levere & Robert Kurtzman, 2009. "Poker Player Behavior After Big Wins and Big Losses," Management Science, INFORMS, vol. 55(9), pages 1547-1555, September.
    • Handle: RePEc:inm:ormnsc:v:55:y:2009:i:9:p:1547-1555
    DOI: 10.1287/mnsc.1090.1044
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    References listed on IDEAS

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