A new Cornell University study of online poker came to the conclusion that more hands players win, the less money they are likely to get, especially when it comes to novice players.
The reason for such paradoxical results was clear enough: the majority of the wins the gamers had, turned out to be for relatively small stakes. However, the longer they played, and the more excited and confident they got, the likelier were their chances to get blown out on one or more very big stakes. For instance, when people win a dozen $50 hands, they still cannot stop and are going to wind up far behind if they lose a single $1,000 stake.
The study also found that for small-stakes players, small pairs (from 2s to 7s) were in reality more valuable when compared to medium pairs (8s through jacks). "This is because small pairs have a less ambiguous value, and medium pairs are better hands but have more ambiguous values that small-stakes players apparently have trouble understanding," said a study's author Kyle Siler, sociology doctoral student at Cornell University in the USA, a long-time poker player himself.
Siler thoroughly analyzed 27 million online poker hands from the past 2 years, to realize that winning lots of small hands ends up losing to bigger ones. "When you lose, you lose big," Siler said. In order to carry out his study, Siler examined data on nearly 300,000 poker players from HandHQ.com, a company that watches online poker games to inform gamers about their opponent's tendencies. Siler used the PokerTracker software while playing at low, medium, and high-stakes hands of No-Limit Texas Hold'em with 6 seats at the table. The game has simple rules and any single hand can involve players risking their entire stack of chips, Siler said.
In his study, Siler was not only interested in poker but also examined strategy, as well as how humans handle the doubt, deal with risk, reward and variable payoffs. Siler applies this to much of life. Investing money, driving a car, buying a house and simply crossing the street are all acts that involve certain risks and uncertain rewards. For example, if you make several small returns on the stock market, you might get too happy and confident and lose much more money on a big investment. Siler even applies it to driving. The more times you get behind the wheel and break a speed limit, the more are your chances to speed a lot and get in a big trouble. Another good example is adultery. People get away with it countless times but they get caught only one time, therefore losing everything. And, finally and most importantly, unlike the risks at the poker table, where everything you lose is just your loss, in the larger world, you can take down a lot of other people with you.
Kyle Siler's work is published in December in the online edition of the Journal of Gambling Studies and will appear later this year in the print edition.
Tags: Personal Growth