Poker Player Behavior After Big Wins and Big Losses

Gary Smith, Michael Levere and Robert Kurtzman

Management Science, 2009, vol. 55, issue 9, 1547-1555

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.

Keywords: prospect theory; break-even hypothesis; risk; investment (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (32)

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