Study Concludes Many Poker Hands Won Means Lots Of Money Lost

Having analysed 27 million online poker hands, sociology doctoral student Kyle Siler of Cornell University eventually concluded that winning more hands at poker often means losing more money in the long run, particularly for novice players.
Siler’s was interested in studying how people handle risk, reward and uncertainty, and online poker provided a perfect controlled arena for the scientist to study the subject area. He then used the poker tracking software ‘PokerTracker,’ to gather information on six man small, medium and high stakes no-limit Texas Hold ‘Em games in order to collate the information.
Siler explained his somewhat counter intuitive conclusion that ‘winning more hands meant losing more money,’ by concluding, “People overweigh their frequent small gains vis-à-vis occasional large losses,” such that after a few wins players often become more confident, thus setting themselves up for a loss on one or more very big hands.
Other interesting information to come from the study, is that small-stakes online poker players often extract better value from low pairs, sevens or less, than medium pairs, from eights to jacks. As Siler explains “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.”
Kyle Siler’s study has been valued for its wider application to many situations which have discernible risks and uncertain rewards, from investing in stocks to crossing the road. He explains: “These kinds of calculations are made every day…Look at a place like Enron. People took a lot of small chances and won, then took big chances and lost big.”
Finally, Siler concludes, “Riskiness may be profitable, especially in higher-stakes games, but it also increases the variance and uncertainty in payoffs. Living one”s life, calibrating multiple strategies and managing a bankroll is particularly challenging when enduring wild and erratic swings in short-term luck and results.”