 Staying ahead and getting even: Risk attitudes of experienced poker playersDavid Eil () and Jaimie W. Lien Games and Economic Behavior, 2014, vol. 87, issue C, 50-69 Abstract: Frequent online poker players with extensive experience calculating probabilities and expected values might be expected to behave as Expected Utility maximizers, in that small shocks to their wealth would not affect risk preferences (Rabin, 2000). By contrast, reference-dependent loss aversion (as in Prospect Theory) (Koszegi and Rabin, 2006; Kahneman and Tversky, 1979) predicts that risk aversion decreases as wealth moves away from the reference point in either direction. In terms of continuing to play, as well as a more aggressive playing style, we find strong evidence for the break-even effect, the increased pursuit of risk as a player is losing within a session. Players' behavior also appears consistent with existing evidence on reference-dependent labor supply, in their tendency to reduce effort and risk-taking in response to being ahead. Our findings provide evidence for reference-dependent behavior in a flexible, high-skilled setting, under conditions of well-understood monetary risk. Keywords: Decision-making under uncertainty; Reference-dependence; Experience; Risk (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:87:y:2014:i:c:p:50-69 DOI: 10.1016/j.geb.2014.04.008 Access Statistics for this article Games and Economic Behavior is currently edited by E. Kalai More articles in Games and Economic Behavior from Elsevier |
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