Prize and Risk-Taking Strategy in Tournaments: Evidence from Professional Poker Players
AbstractThis 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.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1345.
Length: 25 pages
Date of creation: Oct 2004
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Find related papers by JEL classification:
- M5 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-10-21 (All new papers)
- NEP-EXP-2004-10-21 (Experimental Economics)
- NEP-SPO-2004-10-21 (Sports & Economics)
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