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How to make decisions like a poker player

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Re: How to make decisions like a poker player

#61

Post by lgas »

1retep wrote: post #36
Raidion wrote: post #11

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 decis…

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.

https://en.wikipedia.org/wiki/Kelly_criterion may be of interest.

Re: How to make decisions like a poker player

#62

Post by gammabetadelta »

totorovirus wrote: post #51

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.

yep and in the long-run we are all dead

Re: How to make decisions like a poker player

#63

Post by kqr »

jdmoreira wrote: post #23
calahad wrote: post #17

Earlier quoted context omitted.

"Expected Value is complicated because a 50% chance for $100 is the same as a 10% chance at $1000" Is it though?

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.

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.

Re: How to make decisions like a poker player

#64

Post by alexpotato »

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.

Re: How to make decisions like a poker player

#65

Post by dkjaudyeqooe »

mettamage wrote: post #10
dkjaudyeqooe wrote: post #9

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.

Could you give an example of this?

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.

Re: How to make decisions like a poker player

#66

Post by alasdair_ »

dkjaudyeqooe wrote: post #9

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.

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.

Re: How to make decisions like a poker player

#67

Post by dkjaudyeqooe »

elliekelly wrote: post #27
dkjaudyeqooe wrote: post #9

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.

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.

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.

Re: How to make decisions like a poker player

#68

Post by [deleted] »

suzzer99 wrote: post #13
mettamage wrote: post #8

Earlier quoted context omitted.

> 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.

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.

[deleted]

Re: How to make decisions like a poker player

#69

Post by dkjaudyeqooe »

baobabKoodaa wrote: post #57
dkjaudyeqooe wrote: post #9

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.

> 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

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.

Re: How to make decisions like a poker player

#70

Post by CPLX »

m12k wrote: post #34

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.…

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.

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