Play-Money Poker

Abstract

I present an exposition on stopping behavior and risk appetite of online play-money Texas Hold'em players. I find that a player's stopping probability is mainly driven by the most recent win or loss of a hand, but the effect varies depending on skill level of the player and whether he is winning (up') or losing (down') since the beginning of a session. Furthermore, shocks (a large win or loss) have an additional impact on stopping probability and on risk appetite that is also dependent on whether the player is up' or down', but not on the player's skill level. Players are more likely to stop after shocks, but those that continue to play exhibit higher risk appetite, which is associated with a lower performance. I conclude that although skilled and unskilled players behave differently in normal times, they start to behave similarly after shocks, in terms of stopping decisions and risk appetite. My approach contributes to prior studies on real-money players by differencing the effects of shocks based on skill level and up'/down', revealing subtleties that are unique to play-money players. Understanding the different behaviors exhibited by play-money and real-money poker players can contribute to the knowledge of risk-taking using `other people's money' to achieve ranking objectives.