I spent the summer of 2005 studying poker. I interviewed some of the best players in the world, attended the World Series of Poker in Las Vegas, analyzed “pokerbots” -- poker-playing computers -- and chronicled the efforts of highly rational players, such as Chris "Jesus" Ferguson, a game theorist with a PhD who is a world champion and a formidable one-on-one player.
While poker can be analyzed rationally, with big egos and big money at stake it can also be a very emotional game. Poker players explained to me that there’s a particular moment at which players are extremely vulnerable to an emotional surge. It’s not when they’ve won a huge pot or when they’ve drawn a fantastic hand. It’s when they’ve just lost a lot of money through bad luck (a "bad beat’") or bad strategy. The loss can nudge a player into going "on tilt" -- making overly aggressive bets in an effort to win back what he wrongly feels is still his money. The brain refuses to register that the money has gone. Acknowledging the loss and recalculating one’s strategy would be the right thing to do, but that is too painful. Instead, the player makes crazy bets to rectify what he unconsciously believes is a temporary situation. It isn’t the initial loss that does for him, but the stupid plays he makes in an effort to deny that the loss has happened. The great economic psychologists Daniel Kahneman and Amos Tversky summarized the behavior in their classic analysis of the psychology of risk: “A person who has not made peace with his losses is likely to accept gambles that would be unacceptable to him otherwise.”
To read the full, original article click on this link: Why Do We Hold Fast To Losing Strategies? | Co. Design
Author:Tim Harford
