Prize and Risk-Taking Strategy in Tournaments: Evidence from Professional Poker Players

25 Pages Posted: 13 Oct 2004

See all articles by Jungmin Lee

Jungmin Lee

IZA Institute of Labor Economics; FIU

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

Lee, Jungmin and Lee, Jungmin, Prize and Risk-Taking Strategy in Tournaments: Evidence from Professional Poker Players (October 2004). Available at SSRN: https://ssrn.com/abstract=603525 or http://dx.doi.org/10.2139/ssrn.603525

Jungmin Lee (Contact Author)

FIU ( email )

University Park
11200 SW 8th Street
Miami, FL 33199
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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