An argument for playing a game such as poker with “real” money is that it forces people to play with true risk-reward calculations. While this is certainly better than playing without risk, there exists the question of how to match risk profiles among players. With enough players (large liquid market), they can self-sort by stake size, and this seems fair. With only few people though, the situation is turned around, where a stake size has to be agreed upon at some clearing size (so that enough people agree to play the game) rather than chosen individually, and that same amount of money may be considered as very different values by different people. A pauper and a millionaire do not see $100 as the same value, and will adjust their utilities accordingly, and this will materially affect wagering. Since risk is measured in utility units, it is desirable to match utilities rather than dollar amounts. But there isn’t an agreed-upon utility currency. Or is there?
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