title: Measuring Skill and Chance in Games
creator: Duersch, Peter
creator: Lambrecht, Marco
creator: Oechssler, Joerg
subject: ddc-330
subject: 330 Economics
description: Online and offline gaming has become a multi-billion dollar industry. However, games of chance are prohibited or tightly regulated in many jurisdictions. Thus, the question whether a game predominantly depends on skill  or chance has important legal and regulatory implications. In this paper, we suggest a new empirical criterion for distinguishing games of skill from games  of chance: All players are ranked according to a "best-fit" Elo algorithm. The wider the distribution of player ratings are in a game, the more important is the role of skill. Most importantly, we provide a new benchmark ("50%-chess") that allows to decide whether games predominantly (more than 50%) depend on chance, as this criterion is often used by courts. We apply the  method to large datasets of various two-player games (e.g. chess, poker, backgammon, tetris). Our findings indicate that most popular online games, including poker, are below the threshold of 50% skill and thus depend pre-  dominantly on chance. In fact, poker contains about as much skill as chess when 3 out of 4 chess games are replaced by a coin flip.
date: 2017-12-20
type: Working paper
type: info:eu-repo/semantics/workingPaper
type: NonPeerReviewed
format: application/pdf
identifier: https://archiv.ub.uni-heidelberg.de/volltextserverhttps://archiv.ub.uni-heidelberg.de/volltextserver/23867/7/Duersch_Lambrecht_Oechssler_2017_dp0643.pdf
identifier: DOI:10.11588/heidok.00023867
identifier: urn:nbn:de:bsz:16-heidok-238671
identifier:   Duersch, Peter ; Lambrecht, Marco ; Oechssler, Joerg  (2017) Measuring Skill and Chance in Games.  [Working paper]     
relation: https://archiv.ub.uni-heidelberg.de/volltextserver/23867/
rights: info:eu-repo/semantics/openAccess
rights: http://archiv.ub.uni-heidelberg.de/volltextserver/help/license_urhg.html
language: eng