Steaming - UC Berkely Research

An interesting research thesis was done at UC Berkely. A link to an article based on the thesis is below. The author studies transactions from accounts at a national discount broker and finds that people irrationally sell stocks when they are up and hold stocks when they are down. This is done much to the account holders' detriment.


The finding supports the "disposition effect" which says that people tend to be risk averse when they are "up", but risk inclined when they are "down".


Applied to poker it would imply that players tend to make -EV bets when they are down. In other words they steam. This should be no surprise to any of us, but the point is that one could avoid steaming if he always convinced himself that he was "up".


http://faculty.haas.berkeley.edu/ode...sposition.html