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Online poker: More you win, more you lose

CORNELL—In online poker, the more hands players win, the less money they’re likely to collect, especially when it comes to novice players.

The likely reason, says Cornell University 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 says “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 doing the “cognitive accounting” to fully understand how their occasional large losses offset their gains.

The study, which was published online in December in the Journal of Gambling Studies and will be published in a forthcoming print edition later this year, also found that for small-stakes players, small pairs (from twos to sevens) were actually more valuable than medium pairs (eights 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,” says Siler, a long-time poker player himself.

Siler used the software PokerTracker to upload and analyze small-stakes, medium-stakes, and high-stakes hands of No-Limit Texas Hold’em with six seats at the table. The game has simple rules and “any single hand can involve players risking their entire stack of chips,” Siler explains.

The research not only examined the “strategic demography” of poker at different levels of stakes and the various payoffs associated with different strategies at varying levels of play, but also “speaks to how humans handle risk and uncertainty,” says Siler, whose look at online poker combines aspects of behavioral economics, economic sociology, and social science theory.

“Riskiness may be profitable, especially in higher-stakes games, but it also increases the variance and uncertainty in payoffs. Living one’s life, calibrating strategies and managing one’s bankroll are particularly challenging when enduring wild and erratic swings in short-term luck and results.”

In online poker, a multibillion dollar industry, Siler concludes that “the biggest opponent for many players is themselves, given the challenges of optimizing one’s mindset and strategies, both in the card game and the meta-games of psychology, rationality, and socio-economic arbitrage which hover beneath it.”

Cornell University news: www.news.cornell.edu/

chat20 Comments

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20 Comments

  1. Gayle

    I wish this study came out four years ago before some friends lost way too much money on exactly the kind of psychological errors described here.

  2. James

    There have been poker books (and general gambling books) describing these concepts for the last 35 years. Expert players play tight, they play non-self-weighting strategies, and find out how to squeeze positive expectation out of tricky hands like medium pairs.

    Studies like this are interesting not when they pretend to uncover new strategies for the winning player, but when they analyze the psychology of the losing player.

  3. James

    To be clear, I think these findings are all true and good to know. I’m just saying a lot of people already knew them.

  4. rakeback poker video blogger

    I use pokertracker3 myself on some of the videos in my blog, It is an awesome piece of software. I’m always finding new things it can do. Never would have dreamed of this though. Where can we see the results in more detail?

  5. Lynda

    But then again, there may be many amateur, small-stakes players who don’t CARE that they lose a bit of money; it’s all about enjoying the game.

    Some people approach gambling in terms of an entainment expense. I mean what, essentially, is the difference between losing $50 a week playing poker and spending $50 a week on alcohol when you’re out clubbing on a Saturday night?

    It’s horses for courses.

  6. rakeback poker video blogger

    Agree completely, as a poker addict I can honestly say that when I was losing regularly when I first started playing I was still spending less than I was when I was going out. was cheaper to stay in and gamble. lol

  7. braydenmark

    Playing poker is easy but while playing you need to implement various ideas and strategy’s to win .To know the various ideas one must go through this site before going play poker in online

  8. rakeback poker video blogger

    I agree with that completely braydenmark,

    A few weeks spent learning the basics and a few advanced things about your game of choice before playing cash games online will certainly save you a lot of money. Unfortunately I think most people will always need experience of real cash play under their belt before they really get to grips with what is involved.

  9. Real Deal Poker player

    That goes especially for live games! So much extra to think about with tells, keeping your composure etc. You really have to keep all that in mind every hand your dealt into.

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  11. element

    The more you win, more you lose!

    I agree. Thats why I only play poker for fun and free.

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  12. Super Rooster

    It’s crazy how you start playing poker, learn the hands and basics and then think its a simple game. What do they call it? The great equalizer? You can read all the books and have all the money in the world, then sit down and get your stack ripped out your hands quickly. If you want to be good you have to take what you learn and apply it. There are several sites now where online pros share their actual thought processes with you. Check out http://www.playlikeapokerproonline.com , there is a video and you can sign up for a newsletter for game tips for free.

  13. Nellie Smith

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  14. john ryan

    Yes, good article and it’s fair to say that lots of small wins followed by occasional large losses do occur and a lot of these losses can be summed up as bad beats but the reasoning behind the big losses is surely due, at least in some part, to the tilt that players go on when faced with a loss and it’s this loss of control that creates the larger than normal loss.

    To improve these statistics i’de say that you just need to have a good understanding of the game before you sit down to play and make sure you keep very disciplined. The vast majority of players don’t spend the necessary time needed to be a decent poker player and end up in this yoyo situation which is also partly to do with the fact that YES it’s just a bit of fun.

    However, if you do want to learn the basics http://www.pokersuccessguide.com has a number of pages on the subject, some free training videos, tournaments, rakebacks and a bunch of other stuff which I’ve found to be useful

  15. smith26

    This finding, Siler says

  16. masquerade masks

    It’s easily done alright, James is spot on with his comment about studying the psychology of the losers.

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