Poker Risk Aversion
Poker Risk Aversion Loss Aversion
Would you rather have $480 or flip a coin for $1000? The 2nd option has $20 more in “expected value”, but often times people would prefer the first option, due to “risk aversion”. Kahneman describes this in his book “thinking fast and thinking slow”.
This situation comes up more than you think when you’re at a poker game. In PLO, running it twice has been around for a long time and even though the “expected value” is always the same, people prefer to reduce variance. In some Casinos, this running it twice service costs $10 and in that case, risk aversion is definitely doing the trick.
Another situation is when you’re facing a bet on the turn and you either have the option to shove all-in, protecting your hand or to call and play rivers. Many poker players will prematurely shove turn in order to “get the sure thing” instead of choosing the higher EV play. They pass on marginal situations, feeling that they will get money by waiting as well.
If you’re interested in risk aversion, loss aversion etc, I talk about these topics on my 2nd youtube channel as well:
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