Loss Aversion - Cognitive Biases

The Clue is in the title...

I've heard many times that Poker is a "Mental" game of Strategy...

Looking into what could be considered the "Mental" aspects of the game I soon discovered the term "Cognitive Biases" and for me it opened up a whole can of worms...

One Bias which stands out most as having a strong influence in Poker is "Loss Aversion" which contributes to most of our decisions to Muck what could be great winning hands...

So what Is Loss Aversion? Well its the tendency for us all to prefer not lose a sum than to win a sum of equal value...

An example of this in poker would be to find your self with a fairly good medium range hand such as a 9 pair or slightly higher but be faced with an allin or a high raise, What do you do? Fold or Continue to pay in to what could be a loss?

It's this Loss Aversion we all struggle with every time we buy into a game...

How Many examples have you seen where you could of won that round had you just pay in to it?

Who believes they don't have this Bias?

Favorite Quote ATM "Show me a Good Loser and I'll show you a Loser"

Cognitive biases are a fascinating rabbit hole to go down! I minored in psychology in part because of my own interest in them, and you’re so right that many of them have strong applications to poker as well!

I think the way to overcome the Loss Aversion bias is to kind of change it into an aversion to getting the math wrong—I.e. an aversion to making a -EV call versus your opponent’s hand in a vacuum. That’s because that is an aversion that really helps us since it’s just trying to avoid a mathematical error in our game which is a very necessary skill to win in poker!

Katie Dozier said:

Cognitive biases are a fascinating rabbit hole to go down!

I think the way to overcome the Loss Aversion bias is to kind of change it into an aversion to getting the math wrong !

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Wow Thank You Katie, That's a way of thinking about it I've not considered before now...

You and your success is a proof of concept for me... [emoji4]

Inequitas said:

Wow Thank You Katie, That's a way of thinking about it I've not considered before now...

You and your success is a proof of concept for me... [emoji4]

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Aw, how kind of you! Thanks for making me smile

I'm Wondering who else has looked into Loss Aversion as their number one reason for folding at the tables?

Inequitas said:

I'm Wondering who else has looked into Loss Aversion as their number one reason for folding at the tables?

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Very good question that I’m interested to hear answer to, I think not enough people consider your important point!

It's not disgust, and it's rejection of loss. This is called bankroll management, and it was invented by smart people to make the game more enjoyable. If you have 300$ and you lose 20$ it does not look so unpleasant, but if you have 100$ and you lose 20$ it is already unpleasant.

Cognitive Biases - Very rampant among Poker players they create a reality in which every time they take a beat poker is rigged. They only remember beats but conveniently forget the times when their hands holds or get they get lucky. In their world bad beats should not happen to them.

Loss Aversion - I only play mtt so not sure about cash. It is present in mtts with the pay jumps. Fold and hold onto what you have or make the right play and risk getting unlucky or being wrong and loose what you have. I understand both sides of the argument and do I both in different tournaments.

Which way is correct I do not know. Everyone will say you got to make the right play 100% of time and it will benefit in the long run but I found making an incorrect fold or two can be very profitable.

I have no bias. I play poker just for my own pleasure. If I lose, then I'm not upset because I always play only for the money that I can afford to spend.

joeisi said:

Loss Aversion - I only play mtt so not sure about cash. It is present in mtts with the pay jumps. Fold and hold onto what you have or make the right play and risk getting unlucky or being wrong and loose what you have. I understand both sides of the argument and do I both in different tournaments.

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This is an interesting point about loss aversion in MTTs. It makes me realize that sometimes, when you’re correct to tighten up versus a cEV range, such as when your on the bubble as a mid-stack, that loss aversion can actually be a correct/helpful bias to have at that point.

I have a really tough time throwing chips into the pot because "the math says I'm priced in" or "well, I have equity" or whatever rationalization I can come up with, when those chips are likely going to end up in someone else's stack.

Writing this, I realize that I have a "loss aversion" of sorts - I know that if I fold in any situation, I won't be eliminated. I further know that if I don't fold, I might be eliminated.

Weighing that difference (what is guaranteed vs. what isn't) is to me where one measures loss aversion. I am willing to acknowledge that I've folded and abandoned pots I would have won by sticking my chips in...but nobody is EVER eliminated from a tournament by folding with chips in front of them.

Statsman1 said:

I have a really tough time throwing chips into the pot because "the math says I'm priced in" or "well, I have equity" or whatever rationalization I can come up with, when those chips are likely going to end up in someone else's stack.

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In these situations, I think it may help to remind yourself that the call is profitable if you’re winning x % of the time, as well as the inverse of that—that if you fold even though you are winning x% of the time, then you’re making a mistake and losing money in the long run. Sometimes the latter can feel like a stronger reminder because it keeps us focused on what helps makes players winning in the long run.

I blame my "tight folds" to loss aversion bias.

I, as a human being, deviate from the pure mathematical approach to poker and also base decisions on previous experience of playing poker.

Sometimes folding is the best move to gain money in the long run in certain spots.
Sometimes you might have a gut feeling that you are beat (and be right).
But also sometimes, villain shows up with a hand which was within a range you would have never predicted.