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Risk Tolerance
I'm really fascinated by the more mental aspects of the game and have been doing alot of work/research on it recently, and just came across this interesting question...
It's pretty widely accepted that in poker you should always try to be risk neutral.
Generally speaking...
Risk Loving = Will take any +EV spot, even shots, and even some -EV gambles.
Risk Averse = Will turn down -EV spots, even shots, and even some +EV spots if they are marginal.
Risk Neutral = Will always be happy to take the most +EV decision.
If you were offered £10 or a 50/50 chance of nothing or £22, I think most people would take the gamble.
Whereas most people if offered £1million or a 50/50 chance of nothing or £2.2million wouldn't consider it for a second (and rightly so as that much money means ALOT to most people).
But the question is, to test your risk tolerance, where would you draw the line?
Would you risk £100 to have a 50/50 shot @ £220?
£1000 to have a 50/50 @ £2200?
Where is your limit?
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More interesting (imo) mental game type threads coming to a forum near you soon
It's pretty widely accepted that in poker you should always try to be risk neutral.
Generally speaking...
Risk Loving = Will take any +EV spot, even shots, and even some -EV gambles.
Risk Averse = Will turn down -EV spots, even shots, and even some +EV spots if they are marginal.
Risk Neutral = Will always be happy to take the most +EV decision.
If you were offered £10 or a 50/50 chance of nothing or £22, I think most people would take the gamble.
Whereas most people if offered £1million or a 50/50 chance of nothing or £2.2million wouldn't consider it for a second (and rightly so as that much money means ALOT to most people).
But the question is, to test your risk tolerance, where would you draw the line?
Would you risk £100 to have a 50/50 shot @ £220?
£1000 to have a 50/50 @ £2200?
Where is your limit?
================================================
More interesting (imo) mental game type threads coming to a forum near you soon
Comments
Is it a one time only deal? i.e. how many times can you risk your 100 or 1000? if it's just once then definitely closer to the £100 but if you can take the deal more than once then it definitely would be the £1k. If you can repeat indefinitely you ask can you increase the stake
Surely this risk tolerance is more to do with the amount of money people have to spare rather than their attitude to risk. i.e. someone earning 15k a year wouldn't want to risk the £1k but someone earning 15k a week probably wouldnt think twice about (even the though they may share the same attitudes to risk-both willing to risk 1% of their income or whatever on this type of gamble)
There's definitely an element of people's personal circumstances but I think it's more about the type of person. Like I'm not a pauper, and nor am I rich, so winning say £500 is not going to change my life in anyway really, but I still wouldn't fancy gambling it if it's on a plate for me.
Some people are just naturally nitty and some are naturally up for a gamble. I have no doubt that there are some people where if you said you can have £1000 or 50/50 to win £1900, they'd take the gamble.