Prize and Risk-Taking Strategy in Tournaments: Evidence from Professional Poker Players
25 Pages Posted: 13 Oct 2004
Date Written: October 2004
Abstract
This study examines whether people optimally respond to prize incentives for risk taking in tournaments. I exploit the television game show World Poker Tour as a natural experiment. The results show that professional players strategically choose the degree of risk taking depending on the incentives implied by the prize structure they face. I find that they are more sensitive to losses than to gains.
Keywords: risk, tournament, poker
JEL Classification: M5, D8
Suggested Citation: Suggested Citation
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