For example, you’re playing $10/$20 limit hold’em and you raise from UTG with pocket jacks. Your only caller is a loose-passive player in the big blind. You put him on a big ace. The flop falls 2-5-8 rainbow and he check-calls your bet. The turn brings an ace and your opponent bets out. In deciding what to do, you need to think about the $85 currently in the pot and the $20 it’s going to cost you to call. You need to think about the likelihood of another bet from your opponent on the river, how confident you are in your read that he has an ace, and of course you need to think about your outs – both of them. But the one factor you shouldn’t consider in this scenario is how you put $40 into that $85 pot. As soon as those chips hit the middle of the table, they ceased to be yours. You might be able to win that money, but you cannot lose it.easy cards tricks
The harmful ramifications of sunk cost effect go beyond the simple economics of the pot. Money isn’t the only thing we invest in poker. We also invest a lot of time and effort, and naturally we’d like to see some kind of a positive return on these investments. The time and work you put into a poker session is a prime example. While you’re sitting at the table, you’re busting your tuchus trying to read opponents, interpret betting patterns, calculate odds, figure outs, and evaluate all the many other variables going on around you – all in a noble effort to make the correct decision when it’s your turn to act.
But as we all know from bitter experience, sometimes you can play your heart out, make all the right decisions, and still lose. And all the blood, sweat, and tears – not to mention lost money – that has gone into the poker session is a cluster of sunk cost. The only real return you might have gained comes from whatever you’ve learned during the session. If you’ve acquired any new insight about the game or about an opponent, that’s your compensation. But don’t expect more. If you stay and keep playing when you would otherwise quit – because you’re tired, tilting, or game conditions have deteriorated – purely because you expect to get something positive in return for everything you’ve poured into this particular session, then you’ve fallen victim to the sunk cost effect.marked cards
The decision to leave the game or keep playing should be based solely on what’s in your best interest right now. Are you still playing well? Are the game conditions still favorable? If the honest answer to both those questions is yes, keep playing. If the answer to either question is no, you should quit. This is simple and self-evident, and yet even the most intelligent poker player can get lost in the sunk cost effect. It’s a potent effect because we have such a powerful emotional attachment to believing that our money, time, and effort have been well-spent.
Particularly in the case of money, whatever we paid becomes a threshold – the price of a stock, the amount of a buy-in. We don’t want to move on until we’ve crossed over the threshold, but if you’re not careful the sunk cost effect can turn that threshold into a barrier, holding you back.