A methodology for comparing risk behaviors in the virtual and natural worlds

This paper outlines a proposed methodology for measuring and comparing risk behaviors between two similar populations interacting with functionally identical systems in virtual and natural (or ‘real world’) environments. Ultimately, such a methodology may be deployed to understand how and to what degree the structure of systems may influence the behavior of human system actors by comparing two functionally identical systems (online and live play poker games) and identifying incidents where the apparent magnitude of risk averse or risk seeking behavior among system actors differs from one play environment to the other. Poker serves as a useful test system by being an easily understood system where economic decisions are made based upon incomplete information. Unlike many other real-world systems, the rules and structure of poker are as easily reproducible in a virtual setting as a live play environment. However, the value of this research extends far beyond the doors of the casino and truly isn’t about poker at all. This research is born at the intersection of engineering, psychology, and economics and is built upon insights from all three fields. Understanding whether, how, and to what degree human behavior may be altered by replicating a system virtually may lead to valuable insights into ecommerce, social interaction, telemedicine, distance education, or perhaps any other system with an internet-based or virtual equivalent.