Thoughts?

Link to source: http://www.time.com/time/health/arti...953205,00.html

You can learn a lot about gambling if you're willing to analyze 27 million hands of online poker. Don't have time for that? No worries; sociology doctoral student Kyle Siler of Cornell University has done it for you. His counterintuitive message: the more hands you win, the more money you're likely to lose � and this has implications that go well beyond a hand of cards.

Siler, whose work was published in December in the online edition of the Journal of Gambling Studies and will appear later this year in the print edition, was not interested in poker alone but in the larger idea of how humans handle risk, reward and variable payoffs. Few things offer a better way of quantifying that than gambling � and few gambling dens offer a richer pool of data than the Internet, where millions of people can play at once and transactions are easy to observe and record.

To gather his data, Siler used a software system called PokerTracker and directed it to collect and collate information on small- medium- and large-stakes games. He limited the games to no-limit Texas Hold 'Em with six players in order to eliminate at least some extraneous variables. It was in the course of crunching all that information that he found the strangely inverse relationship between the number of hands won and the amount of money lost. He also noticed that it was novice players who lost the most.

The reason for the paradoxical results was straightforward enough: the majority of the wins the players tallied were for relatively small stakes. But the longer they played � and the more confident they got � the likelier they were to get blown out on one or a few very big hands. Win a dozen $50 pots and you're still going to wind up far behind if you lose a single $1,000 one. "People overweigh their frequent small gains vis-�-vis occasional large losses," Siler says.

Small-stakes players also tend to do better with small-denomination cards. A pair of jacks may easily beat a pair of fours, but people who don't gamble much tend to win more with the fours � or with any cards from twos to sevens. That's because the cards' modest numerical worth is easy to understand: they're valuable but not that valuable. When you get into the more rarefied air of eights to aces, you may start losing perspective and putting up more money. "Small pairs have a less ambiguous value," Siler says.

So what does this have to do with you if you don't gamble? It's the wrong question because, actually, you do. Investing, driving, buying a house and merely crossing the street are all acts that involve discernible risks and uncertain rewards. The more small returns you get from your small investments in stocks, the likelier you are to make � and lose � a big investment. The more times you get behind the wheel and speed a little bit, the likelier you are to speed a lot � with deadlier consequences.

"These kinds of calculations are made every day," says Siler. "Adultery is another good example. People get away with it countless times but they get caught just once and they lose everything."

And unlike the risks at the poker table, where your losses are just yours, in the larger world, you can take down a lot of other people with you. "Organizational malfeasance in general depends on this kind of risk analysis," says Siler. "Look at a place like Enron. People took a lot of small chances and won, then took big chances and lost big." Indeed, Siler points out, during the recent financial crisis, an entire nation � Iceland � went bankrupt in a similar way, trusting high-risk, high-reward investments that quit paying off.

While walking away from the poker table can be easy, walking away from life � and all the risks and rewards it presents you � is not an option. But in both venues, the rule should be the same: gamble only what you can afford to lose � and know when you're approaching those stakes.

I like the part at the end about the risks at poker being yours and yours alone, as opposed to the risks in life in general. If you were to take that, and combine it with certain parts of economic/political theory, you could build a very strong theoretical case against government intervention in this field (because government intervention is only efficient when person A's actions affect person B, and otherwise liberty is infringed).

 

Originally Posted by Jennifear

Shit, who needs a study.

I could have spent 4 seconds and told him that people who can't fold a towel are going to win more hands and lose a lot of money!

LOL!

 

Originally Posted by Jennifear

Shit, who needs a study.

I could have spent 4 seconds and told him that people who can't fold a towel are going to win more hands and lose a lot of money!

You clearly don't know that Cornell professors specialize in studies that are either scientific proof of the obvious or are so counter the conventional wisdom that they are angrily dismissed by the people "in the know."

THese received Ig Nobel awards:

"<span>The research, published as a featured article in the journal Obesity Research in 2005 showed that people eating from soup bowls that don't empty ate 73 percent more soup than those eating from normal bowls, said Wansink."</span>

<span>http://www.news.cornell.edu/stories/...gNobel.sl.html</span>

<span>This one proves why we shouldn't tell the fish why they suck at poker....note the italicised comment at the end of this summary:</span>
<span><span><span><h3><span>2000 - Incompetent people don't know they're incompetent</span></h3>
After the pigeon bonanza, psychology took a back-seat at the Ig Nobels until 2000. Then Justin Kruger and David Dunning of Cornell University regained the limelight with their study of incompetent people (<span>PDF</span>, 468k). It seems the incompetent suffer a dual burden: not only are they bereft of talent, they also don't know they are bereft of talent. Their gross over-estimation of their talents then leads them to make ever more stupid decisions. For evidence of this, just turn on your TV to pretty much any channel.

Entertainingly, the study also found that explaining their incompetence to participants actually improved decision-making considerably. So there's a great rationalisation for telling stupid people how stupid they are. Great.

http://www.spring.org.uk/2007/10/sil...y-research.php

And finally this one, that pissed off both Bobby Knight and Red Auerbach... the study found that there was no such thing as a "hot hand" for pro basketball players.

<span>Gilovich, T., Vallone, R., & Tversky, A. (1985). The hot hand in basketball: On the misperception of random sequences. Cognitive Psychology, 17, 295-314. <span>http://www.psych.cornell.edu/sec/pub...ne.Tversky.pdf</span></span>

<span>"Red Auerbach, the brains behind what is arguably the most successful franchise in American sport history, the Boston Celtics, had this to say upon hearing about our results: �Who is this guy? So he makes a study. I couldn�t care less.� Another prominent coach, Bobby Knight of the 1987 NCAA champion Indiana Hoosiers, responded by saying ��.. there are so many variables involved in shooting the basketball that a paper like this really doesn�t mean anything.�</span>
</span>

</span></span>

 

Originally Posted by Jennifear

^^This was well worth the read! Thanks Bonflizubi! :)

yw- thought you'd appreciate it ;)

p.s. call me bon!

 

Originally Posted by Jennifear

^^This was well worth the read! Thanks Bonflizubi! :)

excellent article bon

Very clever article...I liked it a lot. And I hate it, because there's some really good taken-out-of-context fuel for the socially conservative who want to ban the game.