Online poker study reveals counterintuitive trend

[Michael Martinez]

I don't play poker so maybe long-time players already know this. I found an interesting article on Science Daily that covers a report on how people with many small wins actually lose more money.

ScienceDaily (Jan. 13, 2010) — A new Cornell study of online poker seems counterintuitive: The more hands players win, the less money they're likely to collect -- especially when it comes to novice players.

The likely reason, said Cornell sociology doctoral student Kyle Siler, whose study analyzed 27 million online poker hands, is that the multiple wins are likely for small stakes, and the more you play, the more likely you will eventually be walloped by occasional -- but significant -- losses.

This finding, Siler said, "coincides with observations in behavioral economics that people overweigh their frequent small gains vis-à-vis occasional large losses, and vice versa." In other words, players feel positively reinforced by their streak of wins but have difficulty fully understanding how their occasional large losses offset their gains.

Read the full article here.

It is the nature of science that people will study an idea continuously for many years, gradually modifying it through challenges and clarifications. One study proves nothing. I don't know how much literature has been published in the scientific community that deals with gambling theory but I suspect there is quite a bit.

Gambling theory is often applied to economics, military strategy, and social dynamics. It can be a bit hoity toity at times but I thought this was a pretty interesting article as I think it applies to more than just poker.

Slot machine gamblers, for example, often chase the bonus games, ignoring the fact that they are making more money (in the long run) off the small pays (and also ignoring the fact that when a slot machine isn't paying much, it may still award a low-value bonus here and there).

Slots have a wicked reputation in the gambling guru community because they have the worst possible odds for players, but more people play the slots than play table games. The principle of "I'm getting the wins I want so I'll keep betting" seems to apply consistently.

I've also seen this in horse betting, where people might be betting too much to win on the basis of their successes with place or show bets (show providing the best odds but the lowest payoff). At least, I think that's how it works. It's been nearly 20 years since I last bet on horses.

Not that I want anyone to think of me as a gambler....

[addaminsane]

i feel like this article is kiiind of interesting. I personally hate casino gambling myself unless it is experiencing the live casino in a recreational manner. I don't think slots gurus should be compared to winning poker players.

As far as poker goes, i don't think this applies well to the real grinders. The ones who don't play winning poker, typically just flat out lose more, the time and overweighing wins versus losses is not a factor. The real winners typically have their game down to science, particularly in the ring game area.

For me, when i play, i like to stick to low level 20-40 sngs and play knowing that i need to win 3 out of 10 to be in the money...or 2 out of 10 with a few 2cnds. This particular system keeps me in perspective of the financial aspect, at the same time, i'm competitively and recreationally playing to win, much like a video gamer.

Poker is very diverse and there are a wide range of player types and personalities who play.

[leporello]

Small stake winners who decide to take a shot or think (usually misguidedly) are what keep the mid stakes and even the high stakes games running online poker.

The majority of professionals will normally employ bankroll management whereby they will never play stakes where they have less than 30 buy ins for that level. That figure varies from player to player, some having a shot at a higher level with just 15 or 20 buy while others wont move up without 50 buyins for the next level up. This system is what keeps players from going broke and helps them to get through downswings which are inevitable based on the variance of todays games.

[Unknown Webmaster]

Is it normal that you have to pay to download papers like the one the articles is based on?

I really wanted to read it, but paying 35$ seems a tad expensive to me...

[DealerDan]

Is it normal that you have to pay to download papers like the one the articles is based on?

I really wanted to read it, but paying 35$ seems a tad expensive to me...

I'm friends with Kyle. I'll see if he is allowed to distribute it freely.

[addz123]

dont listen to anything written by an economist. It's all complete balls. Ricardo said this, Smith said that, Shumpeter thinks this, Friedman and Eichengreen say that.

[Michael Martinez]

It IS usually normal that these scientific papers are in fee-based archives. Sometimes you can find a free copy using Google Scholar but you have to filter out several fee-based article archives. It's a pain in the neck. I keep asking Google to create a version of Google Scholar that allows people to ignore all those fee-based sites.

And, yes, economics studies can contradict each other. That is the nature of science. Hypotheses and arguments are shared openly so that people can test and rebut them. The general hope is that only the best ideas will stand the test of time.

Nonetheless, I enjoy reading many science articles (and papers). It also helps with my work (in that I am an SEO theorist and need to study systemic models in many contexts).

[CasinoKev]

Good find Michael. It's really just fundamental poker. It's not about who wins the most hands, it's about who wins the most money.

Beginner and novice players who like to play a lot of hands aggressively tend to win a lot of small pots by betting a lot. They are also prone to making larger mistakes against players who are selectively aggressive.

Better players know the importance of things such as manipulating the pot size, adjusting to stack sizes, and capitalizing on opponents mistakes.

It's kind of like SEO theory. Novice webmasters tend to think in terms of "how many links does it take to get me to #1", even though every situation is different.

In poker, some players believe they should fight to win every pot, while ignoring the situational thinking that is required to win long term.

I'm surprised after all this time here Michael, you haven't taken up poker . It seems like it would be right up your alley.

[Michael Martinez]

I'm reminded of the Kenny Rogers song: "You have to know when to hold 'em, know when to fold 'em, know when to walk away, and know when to run."

[pokeraussie]

i haven't read the article but i don't really get what they are trying to say.

if you are a winning small stakes player, you are good enough to take the bad beats, otherwise you wouldn't be a winning player.

is there something i'm not getting?

@CasinoKev

the novice players who think they need to win every pot whilst not taking into account the situation are not winning players, so i don't get your point either.