[HN Gopher] How to make decisions like a poker player
___________________________________________________________________
How to make decisions like a poker player
Author : fronterablog
Score : 145 points
Date : 2022-06-02 12:32 UTC (10 hours ago)
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| beginnercounter wrote:
| The author sounds like a losing poker player. If my calling
| frequency is based entirely on pot odds, a good opponent would
| just start bluffing me out of every pot by increasing their bet
| size to a point where I can't profitably call.
| csa wrote:
| > a good opponent would just start bluffing me out of every
| pot...
|
| People try this.
|
| > ...by increasing their bet size to a point where I can't
| profitably call.
|
| A good poker player will adjust your expected range based on
| your sizing and frequency of bets/raises, and they will adjust
| their calling/raising ranges accordingly.
|
| Most poker games, especially big bet games are played against a
| range/distribution of hands, not a specific hand.
| ryandrake wrote:
| Yes. The article makes its analogies with a "simplified" view
| of poker. I don't think the author's point was to go deep
| into the game. It's enough to describe the basics like
| bankroll management, pot odds and expected value, and then
| show real world examples of it.
|
| I'll also point out that constructing ranges and thinking in
| terms of ranges/ hand distributions is a _relatively_ new
| development in poker. I mean, the very good players were
| subconsciously doing it all along, but it 's only been
| written down and analyzed in the last 10 years or so.
| csa wrote:
| > but it's only been written down and analyzed in the last
| 10 years or so
|
| I agree with you overall points.
|
| For historical reference for folks who are interested in
| the poker boom of the 00s but were not there, it's more
| like 20 years, if not more.
|
| The book _Let There Be Range_ was published in 2008.
|
| High stakes players were discussing the issues covered in
| that book amongst ourselves (live and online) with quite a
| bit of sophistication for several years before that.
|
| All that said, and supporting the point made above,
| advanced computational support for ranges (esp. via
| "solvers") didn't really start becoming a thing until the
| early 2010s.
| alasdair_ wrote:
| > The author sounds like a losing poker player.
|
| Annie Duke has cashed 39 times at the WSOP and has won at least
| four million dollars at tournaments alone.
|
| Any good poker player would understand that the example was
| simplified for a non-playing audience. It's so obvious it
| didn't need to be stated.
| baobabKoodaa wrote:
| > Annie Duke has cashed 39 times at the WSOP and has won at
| least four million dollars at tournaments alone.
|
| This statistic is almost certainly not counting tournament
| buy-ins. It doesn't represent net profit. If you want to
| evaluate somebody's performance as a poker player, you want
| to look at net profit (among other things). Literally every
| poker player will have some wins, so if you only count the
| wins without counting losses, it will sound impressive but
| not actually mean anything.
| listenallyall wrote:
| > has won at least four million dollars at tournaments alone.
|
| This is most certainly not true, because it doesn't subtract
| the cost of all the entry fees, to the tournaments she cashed
| and the dozens or hundreds she didn't.
|
| "alone" implies she has won additional money in non-
| tournament play, when there is no evidence she is a winning
| cash player.
|
| Finally, there is a LOT more to the Annie Duke story.
| Morally, ethically, business-wise. A winner? A little
| research goes a long way.
| csa wrote:
| > This is most certainly not true, because it doesn't
| subtract the cost of all the entry fees
|
| It is fairly standard in the poker world to discuss total
| winnings in tournaments rather than net winnings.
|
| When discussing net winnings, it's usually discussed using
| an ROI measure (e.g., 30% roi over their past 100 MTTs
| between $1000 and $5000) rather than just dollars, since
| the biggest winners in dollars are almost all winners of
| super high roller tourneys like the Big One for One Drop.
|
| Furthermore, live MTT results in general are often skewed
| due to the unmatched (?) softness of the $10k wsop main
| event for a field that size.
|
| With regards to Annie Duke in particular, I never
| considered her a "good" pro poker player. That said, she
| was pretty good at fleecing amateurs, and she was able to
| play a tight game when she was outclassed.
| listenallyall wrote:
| > fairly standard in the poker world
|
| But this is an article aimed at the general public.
| in3d wrote:
| But note that unexploitable, game theory optimal strategy in
| poker does not differ based on the opponent. It's not just
| based on pot odds, but on the whole sequence of actions and
| cards. Still not a very good article, though.
| cthalupa wrote:
| There are plenty of bots that can play GTO poker better than
| any human, yet they are consistently losers online at higher
| levels.
|
| Hold 'em, at least, still ain't fully solved.
| in3d wrote:
| There are only two ways they can be losers: they are not
| GTO or the rake is higher than their winnings. Hold'em is
| pretty much solved (almost because approximations were used
| for bet sizing). It is possible that you can do better by
| deviating from GTO to better exploit bad players but that
| makes you vulnerable to be exploited yourself.
| csa wrote:
| > The author sounds like a losing poker player.
|
| An additional comment that I copied from another reply:
|
| With regards to Annie Duke in particular, I never considered
| her a "good" pro poker player. That said, she was pretty good
| at fleecing amateurs, and she was able to play a tight game
| when she was outclassed.
| psyc wrote:
| We have no idea what kind of player they are because the
| article isn't about being the best poker player. I don't
| recommend making a habit of bluffing in real life. Unlike in
| poker and certain television shows, people aren't likely to
| respect you for it and it may expose you legally.
| DennisP wrote:
| A good understanding of the odds is where you start though. If
| you don't have that, you'll certainly have no idea how to bluff
| optimally.
| danenania wrote:
| It goes both ways. If you increase your bet size too much on
| bluffs, it becomes profitable to just wait for a good hand to
| call you with and fold everything marginal. The bigger your
| bluffs, the fewer I need to catch.
|
| You'll also become predictable if you _only_ overbet when
| bluffing. If you try to deal with that by making all your bets
| larger, then you lose out on value from your strong hands
| because I can now profitably fold some hands that I would have
| had to call you down with otherwise.
|
| Put another way: you can't exploit someone who makes decisions
| based on pot odds just by changing your bet size, because
| changing your bet size changes the pot odds.
| hnthrowaway0328 wrote:
| I think life is way more complex than the poker. Yes the mindset
| could be useful, but mindset without proper data is not going to
| help a lot.
|
| Here is what I'm thinking: How about we go up a level, and accept
| that life is basically random and a lot is decided by luck (your
| gene is luck, your childhood education is also luck, these two
| pretty much decide a lot of things), as indicated in the article,
| but maintain a (meta) mindset that can manoeuvre around or even
| mitigate negative emotions?
|
| For example:
|
| - Realize that probability is useful in poker but not that useful
| in life, thus it is impossible to calculate mathematical
| expectation.
|
| - Learn to harden one against impulsive emotional acts (impulsive
| purchase, suicidal thoughts, etc.).
|
| - Learn to control one's material requirements and save some $$
| for rainy days.
|
| - Keep connections active so when really bad days come maybe
| someone can get you out.
| kqr wrote:
| Probability is incredibly useful in real life. But it takes
| deliberate practise. You can improve your "sense of
| uncertainty" and assign fairly accurate probabilities to
| things. This process is known as calibration.
|
| It also helps to know some probabilistic identities to derive
| the same probability multiple ways and see if there's
| consistency in your assessment.
| hervature wrote:
| > Realize that probability is useful in poker but not that
| useful in life, thus it is impossible to calculate mathematical
| expectation.
|
| That's very backwards. Sure, "exact" expectation no. But you
| can add errors bars to all your estimates, that's the basis of
| statistics. Being able to correctly estimate things and adjust
| for uncertainty is incredibly useful in life. Unlike poker, you
| have time to actually punch things into a calculator and
| consider different scenarios if you want to be super diligent
| but most things can be intuited if you have a solid grasp of
| probability/statistics. To be super pragmatic, the whole thing
| with fake news and misinformation wouldn't exist if people just
| applied Bayes theorem. For instance, people will say something
| like P(vaccine is dangerous | bad pharma company) = 1 but then
| P(bad pharma) = 0 in the sense that Pfizer doesn't want to kill
| people.
| SnowHill9902 wrote:
| Then they won't invite you to the table again.
| DeathArrow wrote:
| As an amateur poker player, both at the table and in life, I can
| say that sometimes the biggest wins are the result of bluffing.
|
| It does not matter what hand an opponent has as long as you can
| convince him you have a better hand.
|
| Also, it is handy to recognize the situations when an opponent
| might bluff, so you can call.
| kqr wrote:
| When you put it this way, it sounds like you are referring to
| plain deception, and not actual game-theoretic bluffing.
|
| Bluffing is about making non-optimal choices for the express
| purpose of making it more expensive for someone else to make
| optimal choices. If someone knows you're engaging in bluffing,
| that's fine, because by bluffing you're still forcing them onto
| non-optimal lines.
|
| On the other hand, you would prefer people not to know that
| you're engaging in deception.
| morley wrote:
| I've also heard this topic referred to as "results-oriented
| thinking," which is generally what you don't want: you shouldn't
| judge a decision based on its result, but on the information you
| had at the time.
|
| The key to this idea, which I don't see covered in the blog post,
| for making future decisions is that you shouldn't let past bad
| luck affect your future decisions. If you lose a positive EV bet,
| it shouldn't shy you away from making the same bet again.
|
| Some examples off the top of my head about decision-making traps
| people could make: - Continuing to bet at the roulette wheel to
| "regain" what you've lost - Not going to a well-rated restaurant
| again just because you had a random bad experience - Not
| investing in ETFs after being burned by past downturns - Playing
| MTG and not burning them out just because they had a counterspell
| last game
| mettamage wrote:
| > Not investing in ETFs after being burned by past downturns
|
| Helloooo Japan!
|
| ETFs are great, it will _never_ happen to the US economy :)
|
| In other words, based on market behavior from multiple
| countries, it is definitely a possibility that ETFs won't
| return much in a period of 30 to 40 years.
| suzzer99 wrote:
| And what's your alternative? Cash under the mattress gets
| killed by inflation. Gold has its runs but usually
| underperforms. Bonds also get killed in a downturn.
| whiplash451 wrote:
| There is no pure financial alternative. But a reasonable
| alternative (or complement) is to invest some money in
| projects/investments that will for sure have a worse
| expectation than ETFs, but simply bring you joy in life or
| new learnings.
| DennisP wrote:
| Diversification across asset classes.
|
| Physical cash is terrible but to an investor, "cash" tends
| to mean something like t-bills, which over the past century
| have done slightly better than inflation. Gold is horrible
| if you have too much of it, but it tends to do well in
| equity crashes, so mixing in a little can be helpful. Bonds
| also sometimes do well when stocks go down, though I think
| that's more likely when you start at higher interest rates.
| Commodities can have 15-year bull markets independent of
| everything else. An investor in Japan would have done fine
| if they had a lot of foreign stocks. Etc.
| [deleted]
| crucialfelix wrote:
| Gold has outperformed stocks this year.
|
| https://www.google.com/finance/quote/GLD:NYSEARCA?compariso
| n...
|
| 10 year Treasury outperformed NASDAQ https://www.google.com
| /finance/quote/GLD:NYSEARCA?window=YTD...
|
| That's diversification, even if it just means losing less.
| mettamage wrote:
| There might not be an alternative.
|
| However, the example is simply wrong (IMO) since it assumes
| that within a 30 year timeframe you'll have gained 8% on
| average (adjusted for inflation). If this would be true,
| thne yes it would be a decision-making trap. I think that's
| what morley is getting at.
|
| I'm arguing it's a tough sell that the S&P 500 works like
| that. If one would agree that the S&P 500 might not
| continue to give 8% ROI on average over a 30 year time
| frame, then one might consider doing something else with
| their money. For example, maybe it's more fruitful to
| invest in yourself to upskill even more rather than putting
| your money into the markets. I don't know I haven't
| researched it, I myself try to beat the market, it's a fun
| endeavour. The jury is still out.
| lexapro wrote:
| There are ETFs that invest in international stocks. VT
| for example. That way you're not betting it all on one
| country.
| pirate787 wrote:
| The revenue of the S & P is 50% global so pay attention
| that 1) US ETFs already have huge global exposure and 2)
| many country ETFs have global corporations in them
| mettamage wrote:
| That's a good point, betting on the world is a more
| viable strategy. That is at least, if the world is
| growing in an economic sense. With that said, since the
| world population will grow, I'd be willing to make that
| bet. In this case, I'd say the example holds up.
| whiplash451 wrote:
| The point of investing in an ETF is not exactly to bet
| that the economy will grow no matter what, but to
| minimize variance and regret with the money you had at
| the beginning (i.e. you may end up in the red, but in
| terms of expectations, your likelihood of being in the
| red was no worse than the average).
| strix_varius wrote:
| Exactly - for me, investment is less about "making it
| big" and "beating the market," and more about, "storing
| the value of the work I did to earn this $X."
|
| Such that, if the "burn rate" for my household today is
| $60k/yr, and I store $60k in investments, then when I
| withdraw at some future date $X will still be enough to
| support my household for a year.
| LudwigNagasena wrote:
| Results-oriented thinking is bad, but so is not updating your
| priors.
| llaolleh wrote:
| Glad to see a fellow Bayesian in here lol.
| curun1r wrote:
| Results-oriented thinking is just one of many human cognitive
| quirks that are often maladapted to the modern world.
|
| A major one is how we tend estimate probability. We naturally
| do that by equating it with how easy it is to imagine or
| remember it happening. This worked well in a tribal situation
| where our world was very small...if Grog got attacked by a
| tiger, there's a good chance that tiger attacks are a serious
| danger that I should consider. But this breaks down in the face
| of a global society of billions of people and a media that
| profits from making people afraid. Rare events get magnified by
| media attention and feel, to us, like they're incredibly
| likely. Plane crashes are incredibly rare. Even in a plane as
| fundamentally broken as the 737 Max was, passengers were safer
| traveling that way than by car. But since every airplane crash
| is covered extensively on the news whereas car crashes rarely
| merit a mention, people's primitive cognitive quirks kick in
| and they're more afraid of flying. You see it with mass
| shootings too. Even if you get 1-2 per day in the US, that's
| still maybe a few hundred people per day who are directly
| affected. Over the course of a year, that's roughly 70k people
| out of 330 million, or %0.02 of the population. Which isn't to
| say that we shouldn't do everything we can to prevent it, but
| when you hear people saying that they don't feel safe, that's
| entirely on the media and how it's warping our perception of
| the danger rather than it being a real threat to our lives. We
| also saw it with the spate of Asian attacks that became a media
| favorite. There was a story of Asians in New York starting to
| contort their lives to avoid becoming victims. But when I
| looked up the actual statistics, there were 20 such attacks at
| the time in a city with 1.2 million Asians. Which, again,
| doesn't mean that we shouldn't be treating each of those
| attacks as terrible and be doing everything we can to stop
| them, but when you consider 20 victims out of 1.2 million,
| that's just not a risk that's worth going to considerable
| inconvenience to avoid.
|
| There was an interesting TED talk many years ago from a guy who
| specialized in these kinds of cognitive quirks. And he
| discussed the findings of one particular study that always
| stuck with me. In it, participants were presented with one of
| two hypothetical situations. In the first, they were going to
| the theater to see a movie and they pre-purchased the ticket
| for $20, and also brought along a $20 bill. When they arrived
| at the theater, they found that the ticket had gone missing.
| Almost all participants in the study said they'd turn around
| and go home rather than using the other $20 to purchase another
| ticket. In the second case, they were going to the theater to
| see the same movie, but instead of having pre-purchased a
| ticket, they were intending to buy one when they got there. But
| they had, instead, brought two $20 bills with them and managed
| to lose one on their way to the theater. Almost all
| participants presented with this scenario chose to use their
| remaining $20 bill to buy a ticket. Despite the situation being
| basically identical, when you're presented with both scenarios,
| we have a cognitive quirk where we don't want to pay for
| something twice whereas we can rationalize the loss of money
| that we never spent. But what got to me about that study wasn't
| the results, but how intuitive both decisions felt to me. I
| could feel how unpleasant it would be to buy a second ticket
| and, yet, how easy a decision it would be to buy a ticket for
| the first time even after losing some of my money. The lesson,
| for me, was that while I've always thought of myself as a
| logical person and someone who would always let statistics or
| other scientific basis guide my thinking, it's still really
| hard to follow through with that.
| prometheus76 wrote:
| Do you drive a car? I am asking because statistically
| speaking, it's the number one killer of people from age
| 21-65. Very few drivers go their whole life without getting
| in an accident.
|
| Statistically, on any given day, the odds of being in an
| accident are quite low. However, if you drive for 30-60
| minutes every day, you are exposing yourself to a low amount
| of risk consistently over time, which inevitably means that
| one day, your number will come up.
|
| Most people don't have a background in probability or they
| haven't taken the time to look at driving, but for those who
| consider themselves normally "rational", they're often very
| surprised to see just how dangerous driving a car really is,
| but they just weren't aware of the amount of risk.
|
| Analyzing the risk of driving every day is an exercise worth
| doing. That being said, I have a fairly high level of risk
| tolerance, so I drive to work every day because I live just a
| little too far to reasonably walk, and riding a bike would be
| a higher risk than driving because of lack of adequate road
| shoulders for much of the route between my workplace and
| home.
| burrows wrote:
| This is people self-reporting about unexperienced
| hypothetical situations?
| lamroger wrote:
| > I've also heard this topic referred to as "results-oriented
| thinking," which is generally what you don't want: you
| shouldn't judge a decision based on its result, but on the
| information you had at the time.
|
| Had this happen at work recently and shapes why I was ok with
| the outcome even though it wasn't what we wanted.
|
| I was building an integration and got it working and trying to
| push to Prod when I realized the integration with the 3rd party
| required a security audit... Given the information at the time,
| it was the right thing to build but didn't do deep enough
| research. Lesson learned.
| ricardobayes wrote:
| Also known as the 'risk-reward' ratio, a concept well-known to
| traders.
| dkjaudyeqooe wrote:
| I've found that frequently bluffing in life pays off. Generally
| you don't get caught very often and the cost of getting caught
| generally isn't very high, even if the stakes are. You have to be
| prepared to take your way out of sticky situations though.
| adwi wrote:
| Yes, lying is often convenient.
| baobabKoodaa wrote:
| > I've found that frequently bluffing in life pays off.
|
| Other life pro tips:
|
| - Stealing is a way to get money
|
| - Murder may be useful
|
| - Fraud is profitable
| dkjaudyeqooe wrote:
| None of those are bluffs, or even close.
|
| A bluff, in this context, is claiming or insinuating you're
| in a better position that you really are.
| baobabKoodaa wrote:
| Whatever helps you sleep at night.
| elliekelly wrote:
| I think people who tend to "bluff" often also tend to seriously
| underestimate how often they're "caught". Just because no one
| has called you on your bluff to your face doesn't mean you
| haven't been caught.
| jhugo wrote:
| Does it matter?
| muh_gradle wrote:
| Bluffing in poker doesn't mean something silly like going all
| in with 72o. It can be something like playing a relatively
| weaker hand more strongly because you've evaluated the range
| of hands that your opponent can have and the range of hands
| that you could have. Likewise, in real life, bluffing doesn't
| have to mean outrageous lies.
| dkjaudyeqooe wrote:
| So in a requested example below I give "I was renting a flat
| in SF in 2010 and claimed I had a better offer elsewhere and
| got 5% off in order to take their flat instead."
|
| How do I get caught? If they say no I get up, pause then
| change my mind.
|
| I've never suffered from being caught by a bluff, but I
| structure them sensibly.
| tokamak-teapot wrote:
| Everyone else who rented a flat negotiated 10% off. Your
| landlord guessed you were lying so altered subsequent
| planned rent increases to more than make up the difference
| - because they don't like you.
|
| It surprises and slightly delights me to see how often
| people who try to 'game' others, queue jumpers, and others
| who display selfish behaviour are then given special
| (negative) treatment from those who notice their behaviour.
|
| Some seem to go around thinking that people are awful, but
| really people are just awful to _them_. People are
| generally kind and help each other.
| mettamage wrote:
| Could you give an example of this?
| dkjaudyeqooe wrote:
| The first thing that comes to mind is bargaining. I always
| claim I have a better choice elsewhere and that I need a
| discount to close the deal. So I was renting a flat in SF in
| 2010 and claimed I had a better offer elsewhere and got 5%
| off in order to take their flat instead.
| fer wrote:
| Not OP either. Here there aren't turnstiles to access the
| commuting train, but there are controllers on board from time
| to time. With seldom use, it's just better not to buy a
| ticket (read: to bluff).
|
| Numbers made up and simplified but in the same ballpark:
|
| Round-trip ticket across town: 10EUR
|
| Monthly pass: 50EUR
|
| Fine: 70EUR
|
| The chance to be controlled is roughly 1 in 10 for a round-
| trip. So if one did 5 round-trips in a month, on average one
| would pay 70 x 5 x 0.1 = 35EUR. Which is a good price with
| acceptable variance fur such usage. When caught just pay
| without fuss.
|
| At some point (between 7 and 8 round-trips) it's more cost
| effective to just buy the monthly pass, as the average cost
| of not buying approaches/goes over such threshold.
| Spooky23 wrote:
| People who describe themselves as super honest usually are
| self-deprecating. They tend to under value their knowledge
| and experience.
|
| The reality is, 95% of scenarios don't require what is asked
| for, and stating your capabilities in the most generous way
| is the optimal decision. Just back it up with work.
| mettamage wrote:
| Underrated comment :) Upvoted and favorited.
| dkjaudyeqooe wrote:
| This is another example I'd use of a bluff: basically
| saying that you can do a job even though you've never done
| it before. If you're good and confident in your abilities,
| it all works out in the end. Everyone wants ridiculous
| experience but at the end of the day they're just trying to
| make sure you can do the job.
| quadcore wrote:
| he's bluffin
| permalac wrote:
| Not OP.
|
| I've seen many people getting a 3 year contract without
| having a clue of what they had to do, just buzz words.
|
| Public sector
| short_sells_poo wrote:
| It's the oldest trick in the book.
|
| As much as "fake it till you make it" is a much hated
| approach, there's a grain of truth to it. Many people only
| got the chance to prove their merit by bluffing (faking?) it
| first. Sure, they had to ultimately deliver on the
| expectations, and perhaps there are more of those who faked
| it and then failed to deliver. It doesn't change the fact
| that often you don't even get the chance if you don't project
| an aura of confidence.
|
| Generally speaking, being confident gets you to places. This
| really applies to every aspect of life.
|
| If you act like you belong somewhere and that there can be no
| questions about you belonging there, people in general will
| not question your presence. If you seem lost, or confused
| people will be curious why.
|
| Walk into a private event acting like you belong, and there
| are good chances nobody will realize you shouldn't be there.
| Walk around looking all confused and you are likely to be
| asked to validate your presence.
|
| Naturally, this doesn't apply only to places, but also
| groups, communities, companies...
| alasdair_ wrote:
| The main problem that I have with lying regularly is that in
| order to lie effectively, you need to somewhat believe your own
| lies.
|
| Eventually, you really do believe the lies you tell and then
| your ability to see the world for what it is is diminished.
|
| Additionally, when dealing with other people, we tend to fill
| in the blanks about the things we don't know about them using
| information we have picked up from other people as a template.
| We know ourselves better than any other person, so we often use
| our own motivations as a stand in for the motivations of
| others. If we are liars ourselves, we assume other people are
| liars too, by default (and, due to confirmation bias, once we
| look for evidence of this, we find it everywhere).
|
| This mindset means we end up trusting people less than is
| probably optimal, but we are unaware of this fact.
| dkjaudyeqooe wrote:
| Bluffing is indeed lying, but in a fairly innocuous way.
|
| Say you're a physical coward and you're being picked on for a
| fight by someone. You can puff your chest up, put your
| shoulders back and put a sneer on your face, possibly scaring
| the bully off.
|
| Yes you're misrepresenting yourself. You're lying. But how
| exactly is that corrosive to your character?
| photochemsyn wrote:
| The suggested step 2 in this article is 'calculate the expected
| value' . . . but isn't this going to be far more complicated in
| practice? See:
|
| https://en.wikipedia.org/wiki/Expected_value#Expected_values...
|
| Probability distributions are _complicated_. Even determining
| what kind of distribution you are look at is difficult in many
| cases. Such distributions are also skewed in real life by things
| like insider information (in poker, that would be cheating). Even
| so the list is rather intimidating, assuming fair play:
|
| Bernoulli, Binomial, Poisson, Geometric, Uniform, Exponential,
| Normal, Standard Normal, Pareto, Cauchy
|
| If financial institutions (and crypto players) are using these
| kind of approaches to make their bets, then isn't the individual
| investor hopelessly outgunned in the vast majority of cases?
| Plus, not having a big pool of capital to absorb temporary losses
| makes that situation even worse.
|
| Investment capitalism, in other words, is just a casino for the
| uber-wealthy. Letting it rule the economy is a serious mistake.
| kqr wrote:
| It's even more complicated than you think! The theoretical
| distributions you list are just that: theoretical. No real-
| world process generates values exactly according to a
| theoretical distribution.
|
| So you're not even dealing with a somewhat countable list of
| distributions -- everything has its own unique distribution!
|
| Fortunately, you don't need to model things exactly. A very
| rough approximation often gives me miles better results than
| plain gut feeling.
| passivate wrote:
| Its not only complicated, its bordering on the impossible. They
| are simply hand-waving the "analyze your past decisions" part.
| Its extremely difficult to be introspective like that. You
| don't know why someone said "yes" to your deal, and not to
| someone else. You can guess, but there are so many micro things
| that fall in your favor when you're successful. Context
| matters, environment matters, and while we can capture our
| thoughts, we can't always capture the environment in which
| those events occurred, etc, etc. This is Harvard business
| review type stuff, excepting each person to accurately weigh
| and analyze all that is unrealistic. You're going to find
| examples of people who "read the book" or "attended the
| lecture" or "sought advice from X" and struck gold, and these
| examples provide buoyancy for such ideas.
|
| >If financial institutions (and crypto players) are using these
| kind of approaches to make their bets, then isn't the
| individual investor hopelessly outgunned in the vast majority
| of cases?
|
| When its your job, you're better at it compared to someone for
| whom its a hobby. And also, larger firms are able to manipulate
| the market which tilts the balance in their favor.
| totorovirus wrote:
| Well you can play millions of poker hands online. Life isn't like
| that. You have only ~30 years, and you have 30 * 365 = 10950
| hands if we count each day as a hand.
|
| So what you need to work on is how you define "success" in life.
| Money is a high variance objective, whereas self-improvement is a
| low variance objective. I think finding a good balance of
| variance and tolerance to risk is a key to happiness.
| criddell wrote:
| 30 years? Maybe your tolerance to risk is a bit on the high
| side...
| UmbertoNoEco wrote:
| High side? If I am understanding OP correctly he says one
| only has 30 years to "make it in live" or you're fucked and
| if I am understanding you correctly you think that is too
| high. If that is the case both of you are wrong.
| angarg12 wrote:
| Slight offtopic, but this is why the "if you try hard enough
| you will succeed" advice sounds like BS to me. Even if the most
| dedicated entrepreneur can only try so many startups in their
| lives. If the odds are vanishingly small then success is far
| from guaranteed.
|
| Rejecting the role of luck in our outcomes is delusional, and
| people who support it have something to peddle (if only their
| own personal brand as thought leaders).
| ryandrake wrote:
| If you're good, your profit depends on the number of hands
| you get to play. And that number of hands you get to play is
| based on your bankroll.
|
| In the non-poker real world, most people maybe get to play
| one hand in life, and that's it. One at-bat in a baseball
| game, to use a different analogy. You dump 20 years of
| savings into buying that laundromat, and that's your only
| shot of making it. If we are really lucky we might get one or
| two more hands to play but that's it for the vast majority of
| us.
|
| The rich get as many hands/at-bats in life that they want to
| play, so they will eventually win one. They can just serially
| start business after business until one of them lucks out and
| succeeds, then do talks for the rest of their lives on how to
| be good at business.
|
| Money buys you chances to make money.
| WJW wrote:
| Alternately, if you find yourself in the situation where
| you were not born rich then that should influence your
| strategy. Apply the Kelly criterion and carefully make a
| number of appropriately sized bets based on your currently
| available capital. Don't dump 20 years of savings into
| anything, but carefully build up investments over time.
|
| Measuring your net worth against those born rich is a fools
| errand, but you can definitely make your children have a
| better shot against their children. True wealth is almost
| never built up in a single generation, despite the fairy
| tales about the "American Dream" that we tell our children.
| layer8 wrote:
| Yeah, it's more like "if you _don't_ try hard you're unlikely
| to be successful" combined with "you shouldn't underestimate
| your chances of having _some_ kind of success if you put in
| some grit".
| gammabetadelta wrote:
| yep and in the long-run we are all dead
| Raidion wrote:
| I'm a serious but hobbyist player with ~15k hands last month.
|
| The thinking like a poker player is mostly about being upfront
| about your risk tolerances and then having a culture supporting
| people who make the best risk adjusted decision, even if it
| doesn't work out.
|
| Expected Value is complicated because a 50% chance for $100 is
| the same as a 10% chance at $1000. It's the variance, not the EV
| that makes a lot of decisions hard.
|
| You (and businesses) need to decide what risk is acceptable,
| communicate that clearly. Reward people who manage risk in a way
| that's aligned with the business even when it doesn't work out.
| Get rid of people who are either take too big risks, and people
| who don't take risks.
| jvanderbot wrote:
| I imagine poker players don't use expected value. That's silly.
| You'd be all-in on a bet with positive expected value for no
| good reason.
|
| They use expected returns in conjunction with size of current
| pot and size of current holdings.
|
| What you say about variance is right on. It involves the payout
| and the odds and so on ...
|
| They use something internally like the Kelly Criteria, probably
| tuned against their own model of what is the probability of
| each relevant outcome.
| JoshuaDavid wrote:
| If your bankroll is small enough that Kelly vs naive EV
| calculations are giving you significantly different answers
| for what you should do, you are probably playing at stakes
| higher than you should be (or you're playing in a tournament,
| in which case the optimal strategy is indeed different than
| in a cash game).
| 1retep wrote:
| I also like the discourse on bankrolls and bets sizing. I think
| being able to correctly size your bets is such a great, albeit
| challenging skill to have in the real world.
| kqr wrote:
| Go here for more focused practise:
| https://static.loop54.com/ship-investor.html
| lgas wrote:
| https://en.wikipedia.org/wiki/Kelly_criterion may be of
| interest.
| sokoloff wrote:
| One major problem here is that many players dramatically
| overestimate their edge.
| nogbit wrote:
| Poker players use "pot odds".
|
| The odds of winning a hand with a future card in order to
| estimate the call's expected value.
| matchagaucho wrote:
| Glad someone mentioned this. A 52 card deck with 3 Aces
| showing means there is only 1 Ace remaining (either in hand
| or deck).
|
| Future cards have significant impact on odds and betting.
| myownpetard wrote:
| Pot odds are just the ratio of the current bet to size of the
| pot.
|
| If you have not yet made your hand (e.g. only 4 spades) then
| you consider your drawing odds, which is the chance of making
| your hand.
|
| But say there is a pair on the board. Then you need to
| consider the probability that your opponent has or will make
| a full house, which would beat your flush if you were to hit.
| Likewise the probability that someone will have a higher
| flush than you.
|
| Analyzing this in aggregate is what gives you the expected
| value, which is what poker players consider.
|
| If you are simply playing a cash game with unlimited buy-ins.
| Then assuming your overall bankroll is sufficient, you will
| always make plays with positive expected value, even with
| high variance, because it is a continuous game and you expect
| the total return to be positive over sufficient iterations.
|
| If you are playing a tournament with a set number of places
| in the money, then you need to take into account the variance
| as well as the expected return because it is an episodic game
| and the types of plays you will make will depend on not just
| expected value of the single play but what place you are in
| currently and the number of players left.
| myownpetard wrote:
| And probably the most difficult to estimate are the implied
| odds. If you do make your draw, how much money can you
| expect to make in later betting rounds.
|
| Implied odds are interesting in that they can make very bad
| hands more playable because if you do hit, then the
| likelihood that your opponent believes that they are
| winning is higher (because the chances of such a bad hand
| being played rather than folded immediately should be low)
| and thus the probability that you can elicit more money
| from them is higher.
|
| Small pairs and low suited connectors are good examples of
| these kinds of hands. Your pre-flop chance of winning with
| a pair of 2's on a full table is pretty low. But if the
| flop is 2-K-A, you will likely get a lot of action.
| Melatonic wrote:
| As someone who used to live with a pro poker player that might
| be the beginning but it really comes down to the psychological
| aspect of being able to disconnect and deal with losing a TON
| of money in the short term. You need to be able to quit,
| consistently, after losing massive amounts and then come back
| and do it all again the next day. Over and over. And the losing
| streaks can be long.
| whiplash451 wrote:
| mmm, you mean 5% at $1000, right?
| boatsie wrote:
| Perhaps GP isn't a very good poker player :)
| bglusman wrote:
| I think you meant a 50% chance for $100 is the same as a 5%
| chance for $1000 right? Just... funny math error as I was like,
| wait, no... I'll take the 10% chance at $1000 every time!
| (unless I'm desperate for my next meal, then, as you say, the
| lower variance would point to higher certainty of some money vs
| max expected value)
|
| EDIT: I see someone else noticed this further down than I
| looked in comments, sorry for dupe.
| calahad wrote:
| "Expected Value is complicated because a 50% chance for $100 is
| the same as a 10% chance at $1000"
|
| Is it though?
| jdmoreira wrote:
| The payout is exactly the same but what op means is that you
| need less "50% of 100%" bets than "10% chance at $1000" to
| reach the same payout.
|
| 1 in 2 for the first one will pay out. and 1 in 10 for the
| second one will pay out.
|
| Variance is higher for second than for first.
| calahad wrote:
| "The payout is exactly the same"
|
| Again I ask, is it really?
| westward wrote:
| I think the questioner is asking if
|
| "50% chance for $100 is the same as a 10% chance at $1000"
|
| should be
|
| "50% chance for $100 is the same as a 10% chance at $500"
| jdmoreira wrote:
| ah yes, of course. You are correct
| [deleted]
| kqr wrote:
| At first I was confused because of my mental rule of thumb
| that in a Bernoulli choice, p=0.5 is highest variance.
|
| But that is when the payoff is 1, of course!
|
| When it's not, we're really looking at payoff2 * p * (1-p)
| and indeed the second situation has much higher variance.
| nightpool wrote:
| OP messed up their numbers--they probably meant 5% chance for
| $1000 ($50 EV to match .5*$100) or similar. But I think their
| point is still clear
| lordnacho wrote:
| Where's the best place to play online? Non-US citizen.
| dave7 wrote:
| Non-US? PokerStars, by a country mile. Always has been.
| ricardobayes wrote:
| The golden days are sadly gone. It has pretty much all been
| dried up after the US crackdown. Before that, sites were full
| with very loosely playing Americans who viewed a loss of a
| $100 just 'entertainment' or equivalent of a night out. With
| that all gone, you have tons of very tight Chinese and
| Russian players these days. Lots of hunters and not a lot of
| moose.
| baggiponte wrote:
| Wow this is 1000x than what's in the article - thanks.
| elhudy wrote:
| >Get rid of people who are either take too big risks, and
| people who don't take risks.
|
| The alternative to getting rid of these people, is offering
| positions to them that better match their risk tolerances.
| rawling wrote:
| > serious but hobbyist
|
| > ~15k hands last month.
|
| Is that not roughly a full-time jobs' worth of poker? (15k
| hands > 12k minutes? > 200 hours > 6h/day)
| m12k wrote:
| I attended a talk by Richard Garfield, the game designer behind
| Magic: The Gathering. He made a point that adding randomness to a
| game can be a way to give it that property of "easy to learn,
| hard to master", and in turn make it easier for a community to
| grow around the game. When you add randomness, it becomes
| possible for novices to sometimes beat more experienced players
| through sheer luck. Contrast that with e.g. chess, where it
| doesn't take much skill difference before the most skilled player
| is almost certain to win. So randomness makes it easier for
| newcomers to get the occasional win, to keep them motivated while
| learning. But at the same time, randomness can make it harder to
| master, because the cause-effect-relationship between good
| decisions and good outcomes becomes blurred, like the article
| points out, defeating the trivial "reward function" we usually
| use for evaluating our performance. It takes a lot of discipline
| to say "I won, but it was luck, because I actually misplayed" and
| learn from that. And on top of that, high level play will become
| a game of analyzing and estimating probabilities, minimizing or
| maximizing variability depending on the strength of your
| position, basically embracing randomness as a gameplay element to
| be understood and sometimes even manipulated, despite being so
| intangible compared to most other gameplay elements. So used the
| right way, adding randomness to a game can both lower the barrier
| of entry, and raise the skill ceiling at the same time.
| Kelamir wrote:
| An alternative to randomness is handicap. For example, Go game
| has ranks and based on them either you or your opponent get a
| handicap. Equal ranked players don't use handicap. It is
| counted that a stone of handicap is worth ~6.5 points, and that
| is what's used in handicap - one player gets additional stones
| placed at the beginning of a match. The system is aiming to
| provide you with 50% win/lose percentage, and every match to
| feel equal.
| sumy23 wrote:
| The issue with a handicap is that if you win you don't feel
| as good because you know that the only reason you won was the
| handicap. It's harder to draw such a conclusion when you win
| due to randomness.
| bsder wrote:
| > But at the same time, randomness can make it harder to
| master,
|
| Except that Magic: The Gathering is _particularly_ bad for
| locking into specific "meta" (metagame) which then persists
| until new cards come out/old cards rotate out. Hardly random
| and hardly difficult to master.
|
| The best MTG players are really good at what I call the "game
| mechanics corner cases". The know _all_ the weird ways to play
| and resolve the cards--this gives them a quite persistent
| couple percentage point advantage.
|
| However, it _won 't_ give them enough advantage to beat the
| "meta".
| LargeWu wrote:
| Agreed. I've seen comments in similar threads in the past where
| people rag on games like poker or backgammon because they
| believe the randomness factor moves them from skill-based to
| luck-based.
|
| In truth, managing randomness is actually one of the core
| skills of the game. Not just on the decision in front of you,
| but on future decisions as well. It's a hard skill to master.
| Moreover, the timelines to evaluate one's skill are long,
| sometimes hundreds or thousands of games, incorporating tens of
| thousands of decision points. It's not a wonder it's often
| misunderstood.
| CPLX wrote:
| This is an interesting comment, and I'd add one other element
| to this, which is that randomness is _way_ more realistic, if
| we think of games as something intended to represent the real
| world in some way.
|
| In real life the best marksman can get wiped out on the first
| day of a war, the best business strategist can get done in by a
| once in a generation disaster, and a hapless idiot in business
| can get an early big break. And so on.
|
| I feel like it feels much more natural and intuitive to us to
| play games that are a mix of skill and random chance.
| pessimizer wrote:
| That depends on whether you think that games should be
| simulations. Even if you think they _should_ be simulations,
| you still might only want to reward optimal play over lucky
| play. If I 'm using a simulation to train someone, I only
| want them to be rewarded for ideal play.
| kqr wrote:
| This is incorrect, as far as the research into training for
| expertise goes. You actually want simulations to be like
| the real world: complex, ambiguous, sometimes with delayed
| feedback and presenting multiple forms of the problem. Of
| course, it also takes a good mentor to debrief with and
| untangle what was bad luck and what was bad decision
| making. (See the Oxford Handbook of Expertise if this stuff
| interests you.)
| kqr wrote:
| Note that this is also why some people prefer games that
| don't have chance -- to experience what that is like.
| spacetraveler11 wrote:
| Thank you for this comment. See [1] for a video of Richard
| Garfield talking about this topic.
|
| [1] https://www.youtube.com/watch?v=dSg408i-eKw
| [deleted]
| theincredulousk wrote:
| Is this site related to Knowledge Project / Farnam Street
| (fs.blog), a competitor, or just a ripoff???
|
| I noticed because I read what seems to be the exact article
| there, with the same illustrations and everything on fs a couple
| weeks ago. Maybe it was a link in the newsletter to this article.
|
| Looking around there is a lot of overlap in content.
| ricardobeat wrote:
| I'm struggling to see how the advice applies to their own
| examples. Take Jane, who took a great offer but was hit by a
| recession:
|
| - potential reward of the decision: checks out
|
| - probability of getting it: 95% if you already have the offer in
| hand
|
| - resources (time/effort/money) to bet to get the reward: not
| significant
|
| Then there is 'imagining a bet' and 'analysing your past
| failures'. The first one might lead you to the _' what if the
| company goes bust?'_ question, but would that really help in the
| decision making or be a reason to _not_ accept the better job?
| The unlucky event is a recession, not this particular company
| doing badly (i.e. no signals to see).
|
| If a recession hits, there is no reason to believe the consumer
| goods co. would fare any better and her old job more secure. I'd
| really like to see the 'poker player' mindset at play but this
| just feels like a complete miss.
| necovek wrote:
| I don't think the advice doesn't apply (they still claim Jane
| made a good decision, even though it led to a bad outcome:
| their point is that Jane should keep making good decisions, and
| not worry about bad outcomes because you can't control luck --
| if you mostly make good decisions, luck won't matter _in the
| long run_ ), it's just that it's pretty much useless because
|
| > "Probability of getting it -- you cannot know the exact
| probability, but estimate it the best way you can (remember the
| bet with a friend)"
|
| is the hard part. Jane's case was clear (good decision), but
| what about Mike? Is there a proportion of his savings he should
| have invested that would have turned his "bad decision" into a
| "good one"? We have no signal to tell us what the probability
| of any cryptocurrency going up or down is over, say, 6 months
| (they've all gone up and down completely arbitrarily).
| Basically, finding the probability of any particular "success"
| (or actually, a failure) will easily tell you how much you
| should risk.
|
| And that's what it's like with the most of life decisions as
| well: we don't know the probability -- not even the ballpark
| range. Likelihood that any one person you meet is going to be
| your life-long partner is basically nil: but we still invest in
| building relationships before fully committing to either decide
| they are not, or increase the probability that they will be.
| But we still do that relationship building investment based on
| very few signals (appearance, short chats and potentially what
| social circle someone is from if from a shared acquaintance).
| kqr wrote:
| There is no probability to know in the sense you mean --
| probability is what we call our personal assessment of the
| situation, incorporating the (little) knowledge we have.
|
| So sure, there is your probability. Will you make money
| knowing it? That's the question you're alluding to.
|
| (As a concrete example: there is no "true" probability of
| rain six days from now. Either it rains or it doesn't. But a
| skilled meteorologist can give you a probability that would
| probably make you a little money over the climate average.
|
| Both the climate average and the meteorologist's assessments
| are correct probabilities. They just reflect different
| amounts of information.)
| mettamage wrote:
| I think like a poker player, I skimmed the article. What they
| seem to fail to mention is that variance is important as well.
| In poker you need to play at _least_ 10000 hands in order for
| variance to average down a bit. 10000 hands is still very
| little.
|
| So, if you have a 95% chance of going 10x that's great, but the
| question is: can you handle a 5% chance of having being
| potentially ruined for at least a decade? If not, then you
| cannot take the bet despite the fact that EV is super high.
|
| Put more extremely, if I offer you a 99% chance to take make
| one billion dollars (legally) and a 1% chance of being killed,
| would you take it? I definitely wouldn't.
|
| How about the following? I offer you an unfair coin flip
| advantage of 51% versus 49%, we're going to flip 1 million
| times, each time the bet is 1 dollar. Would you take it? I
| would.
|
| The heuristic that poker teaches is: take a lot of small bets
| with huge upside with little to no downside. It doesn't matter
| how slim the chance of winning is. Slightly more nuanced (still
| a heuristic): the chance should be about as big as your volume
| of chance-taking. Say, you take 10000 chances, then the
| slimmest chance you can take (on average) is 1/10000.
| Raidion wrote:
| Congrats, that's also thinking like a poker player.
|
| https://en.m.wikipedia.org/wiki/Kelly_criterion
| mettamage wrote:
| I love the Kelly criterion! I should reread it in order to
| see if I can make a better heuristic on optimal bet-sizing.
| schmorptron wrote:
| This is off-topic, but the mobile wikipedia link you posted
| is surprisingly nice to read on desktop. Seems a lot more
| pleasant than the wide lines on the desktop site.
| layer8 wrote:
| This comment comes up repeatedly on HN. While I somewhat
| agree, I would also suggest to not maximize your browser
| window by default, to avoid wide lines. I usually have my
| browser window square-ish.
| tipsytoad wrote:
| I actually wrote a post about this, using a metric for
| expected _outcomes_ instead of ev probability
|
| https://tompollak.me/blog/ev-v-eg/
| bulbosaur123 wrote:
| > Put more extremely, if I offer you a 99% chance to take
| make one billion dollars (legally) and a 1% chance of being
| killed, would you take it? I definitely wouldn't.
|
| I would even if it offered 50+% of getting killed. The small
| chance you strike a billion is worth the risk.
| cthalupa wrote:
| It's a fun thought experiment under the many-worlds
| interpretation of quantum mechanics. Even at an
| infinitesimally low chance of getting the billion dollars,
| if the many worlds interpretation of quantum mechanics is
| true, you could argue that it is worth it from a selfish
| perspective.
|
| In all the worlds where you get the money, your life is
| improved. In all the worlds where you don't, well, you're
| dead, so you don't really care.
|
| Obviously, this doesn't take into account the impacts to
| everyone else in the worlds where you died.
| cm2012 wrote:
| I wouldn't do it for 50%, I can see how some heuristics
| would get you there.
|
| - Right now we spend 33% of our life working, nd the stress
| of work impacts another 33%.
|
| - A billion is also way more than out life expected income,
| but there's a big marginal reduction of value to money. But
| you also get it now when you're younger rather than parsing
| it out.
|
| - As a random 25 year old male, you would only have a 1 in
| 16 chance of surviving to retirement age at 60 on your own.
|
| I personally would only take the deal for 2.5% chance of
| death though.
| stavros wrote:
| How much money would the gain have to be for it to not be
| worth a 50% chance of getting killed?
| ozim wrote:
| I don't think that would make a difference for me if
| someone offers more money when my life situation is kind
| of nice.
|
| What would make a difference would be my life situation -
| if it would be worse or totally shitty I could take even
| 25% for a billion.
|
| That was kind of theme of "Squid Games".
| WJW wrote:
| Sure but at some point the money gets too low to risk it
| even if you are in the dumps, no? Would you take 1
| million for 50%? 10k for 50%? 10 bucks for 1%? 1 dollar
| for 1%?
|
| At some point it goes from a life changing amount of
| money to just "meh" money.
| ricardobeat wrote:
| I would guess the uptake will fall sharply somewhere
| around 10 million, which is still a life-changing amount
| of money for 99% of the population.
| stavros wrote:
| Huh, it's very odd to me that you'd take an even chance
| of dying to win $10m... My amount would be much, much
| higher, potentially infinite.
| acjohnson55 wrote:
| I find that fascinating. I'm not even a millionaire, yet
| money is rarely a constraint for me and life is great.
|
| The only reason I can fathom desiring a billion dollars is
| the leverage it would give me to influence the world in
| what I think is a positive direction. But when it comes to
| money for my own sake, $10M is about the most I can imagine
| having use for.
| bbarn wrote:
| > How about the following? I offer you an unfair coin flip
| advantage of 51% versus 49%
|
| Isn't that just baccarat without ties?
| mettamage wrote:
| I wouldn't know, I don't know many casino games.
| CPLX wrote:
| > if I offer you a 99% chance to take make one billion
| dollars (legally) and a 1% chance of being killed, would you
| take it?
|
| I'd take it in a heartbeat. I've done things that have a 1%
| chance of death just to have a good story to tell.
| seanhunter wrote:
| The non buzzwordy way to express this is to use some basic
| concepts in probability to make accurate decisions in the face of
| randomness. Specifically when making a decision you should think
| about the expectation[1] of the outcomes overall and some
| properties of the distribution. This requires you to think
| through what all the outcomes are and what you think their
| probabilities are.
|
| 1)All other things being equal you should generally prefer a
| higher expectation decision to a lower-expectation one
|
| 2)But you have to avoid decisions which have outcome distribution
| properties you can't tolerate. Most obviously you should
| generally ensure that your risk of ruin is zero because even if
| the probability is very low, that outcome is close to impossible
| to recover from so must be avoided.
|
| 3)For two possible strategies with similar-ish expectations in
| real-life terms you may well want to choose the one with the
| lower standard deviation of payoffs. Like say you're choosing
| between an offer at medical school to train to be a dentist and
| pursuing your long-shot idea of going to Hollywood and trying to
| make it as an actor. Imagine that when you look at the outcomes
| you estimate that in acting you have an insanely low probability
| of making it but a huge payoff if you do and in dentistry most
| people do pretty well but no-one's partying on superyachts with
| Jay-Z and Beyonce. Well even if the expectation of acting works
| out slightly higher, if they are close enough you should probably
| pick dentistry because the variance of outcomes is just way
| lower. If you think about your future as a monte carlo simulation
| you want to end up "ok" on most of the paths in the simulation
| even if that means giving up on some "lights out" outcomes.
|
| 4)most people agonise the most about decisions where the
| expectation is really pretty similar so it just doesn't matter
| that much either way. So don't beat yourself up about whether you
| made the right decision - just try to learn from the decision and
| move forward
|
| A huge mistake people make is to evaluate the quality of the
| decision based on the single possible outcome that crystalised
| into reality by actually happening rather than using the
| framework above. So resist that temptation and instead evaluate
| your decision based on whether you chose to maximise expectation
| while avoiding risk of ruin and excessive variance.
|
| [1]In the sense of being the weighted average of all possible
| payoffs where the weights are the probabilities and the payoffs
| are the utility of each outcome (usually just in cash terms).
| havblue wrote:
| A great concept of Texas holdem is that of chasing the pot:
| calling when the odds aren't in your favor. In other words, just
| because you've come this far it doesn't mean you have to keep
| putting money towards a hand you'll likely lose.
| SMAAART wrote:
| Life's a game of chance where we control the odds.
|
| Just this morning I was reading Scott Adams's How to Fail at
| Almost Everything and Still Win Big, and he was talking about
| making bets in Life that don't cost any money (they only cost
| time) and if we do this there's ~100% certainty of winning. Of
| course he's more eloquent and elaborate. It's also another way to
| look at "we miss 100% of the shots that we don't take".
| freediver wrote:
| It would be interesting to do a decision--making comparison
| between a chess, poker and bridge player.
| alexpotato wrote:
| I think I first heard this quote in one of Taleb's books
| (paraphrasing):
|
| In Ancient Greece, you were a hero for what you attempted to do
| and not for what you actually accomplished. This was because the
| Greeks considered the outcome to be primarily governed by the
| whim of the Fates. What you attempted to do was a function of
| your courage especially given that a big task could lead to a big
| failure outside of your control.
|
| I think of this quote often anytime the "outcome vs process"
| discussion comes up.
| ericdykstra wrote:
| This article, like Duke's book, has a solid premise, but fails to
| provide any actionable advice aside from a simple risk/reward
| framework. When I read the book, I was hoping there would be more
| information about how to properly handicap various situations,
| but there just wasn't.
|
| Business and life decisions aren't as simple as calculating pot
| odds and outs. Anyone who has estimated a complex and unfamiliar
| programming task knows that the unknown-unknowns are the biggest
| part of any equation.
| theincredulousk wrote:
| The largest fault in the practical (life) applications of
| probabilistic thinking is that estimating the odds in real-time
| is often impossible. Poker is a constrained environment where
| the odds are computable.
|
| It's a useful framework for thinking in various situations, but
| it is almost never going to reduce to an equation that can tell
| you some objectively correct answer or decision.
| kqr wrote:
| If the main reason your effort estimations are off is that you
| don't allow for unknown unknowns, then that's easily fixable.
|
| After all, although we don't know which the unknown unknowns
| are, the possibility of them is known. And they do, in my
| experience, tend to increase the required effort by, say, 1--30
| x depending on task complexity and familiarity.
|
| So even in the most complex and unfamiliar of tasks, you can
| adjust the upper end of your estimate by 30x and there you go!
| Unknown unknowns accounted for in your effort estimation.
|
| (Simpler or more familiar tasks require smaller adjustments to
| their upper end. Knowing how much adjustment is appropriate is
| a matter of deliberate practise.)
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