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and how does one introduce annie duke i would say most of all she is a force of nature a best-selling author in multiple books a very famous poker player an expert in decision theory and she has a new book coming out this september
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called how to decide simple tools for making better choices annie welcome thank you for having me i'm super excited to dig in and get into this conversation let me start with a simple question how can we spot situations
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when thinking probabilistically is likely to make our decisions worse rather than better how can we spot situations when thinking probabilistically is likely to make our decisions worse rather than better that is such an
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interesting question uh i would say that i i mean honestly i would say that those situations would only be you know so in some ways i'm not sure that this this means that you're not thinking probabilistically it's just what do you
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do with the information but there are certain times when uh thinking through what the probabilities are in terms of what your reaction is given the downside risk that you might be exposed to uh wouldn't it make sense so the classic
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example would be um if you know the sensitivity versus specificity argument if i'm out on the savannah as an evolving human and i hear rustling in the grass it's probably not great for me to think what's the probability
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that that's a lion because the downside is so great the magnitude of the downside dying is so great that thinking categorically in that just yes or no in that situation uh probably makes sense for survival but i'm hard
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i would love to hear your thoughts on that because i'm kind of hard-pressed to think of example a lot of examples in which thinking probabilistically isn't helpful there may be cases where probabilistically conflicts with the kind of
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authenticity so say one of our audience members is out on a date should he or she set up a kind of mental probability ticker well you saw off the date thinking the chance i marry this person is 2.3 and then if the evening
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progresses the number might go up it might go down it's hard for some people not to think that yet it seems actually your chance just might be lower if you even open up that door at all right well so so actually i love that example so
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uh i think it depends on what your goal is right so if your goal is to find a great match then i think that that's actually helpful because the fact that you're thinking that way means that you're more likely to be talking to somebody who is compatible
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with somebody who thinks that way so while it might reduces reduce the the number of people that you might match with like the chances the number of people that that might end up being long term the quality of the
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match i think would go up because you would be more likely to be compatible in terms of the way that you thought about the world um you know i mean i i always i always think that this kind of goes into the category of kind of what are you doing with the information right so i i one of the things that i really try to think about is what's the difference between uh and i think this goes into this category and correct me if i'm misunderstanding
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but i think about what's the difference between a goal and what's the difference between thinking about what your expected value is so and i think that we confuse the two things that we're allowed to set really high goals and believe that we will reach
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them and at the exact same time we can be thinking in expected value which of course is just combining you know thinking probabilistically combined with with what the uh payoffs are and understand that the expected value
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may be well below what our goal is and i think that these two things can actually live in the same space and it's kind of a false dichotomy to think that you can only do one thing or the other that if you have this kind of running
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ticker of let's call it our expected value on the date that you can't also be having high aspirations and and some optimism about the date working out and i don't i mean i'm just a really big believer that those two things not only
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that they can live in the same space but it's actually useful for them to do so maybe it's a bit like hurdle rates for private business investment so a business might hurdle rate of 50 percent knowing deep down underneath maybe
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they'd be happy with 23 but they know along the way in the process gains will be overstated costs understated so maybe if you're searching for friends or a maid or a marriage partner should you be thinking probabilistically but with bad
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probabilities and just set all your hurdle rates too high because otherwise you're going to fool yourself and leap at silly mistakes i'm just like off the top of my head yeah i mean i think so what are the decisions in our own lives
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that we should not be willing to bet on so you go to your friend your friend says oh i'll bet you on that for which of your decisions should you say no i'm not willing to make you a bet on that like will your kid thanks to should you
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be willing to bet on that with your best friend uh it depends on the friend so so this is something where i i think that it's actually really important in our lives to understand what the purpose of the interaction is so there's certain friends where i would absolutely make that bet um in fact i can tell you a story from my own life but this has to do with like is this kind of part of what's going on in your group in terms of the way that
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you're thinking so that that somebody it doesn't actually jeopardize other aspects of the friendship so when i went on my first date with my husband my brother and brother-in-law immediately decided to make a market and it was
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whether we were going to get married now now to be fair my husband and i before we went on our first date we'd been friends both my brother and my brother-in-law knew my eventual husband but this is when we're going on our first date they make
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a market that i think that my brother-in-law ended up bidding 23. um my brother then called me up cracking up that my brother-in-law had been 23 when we hadn't been on a first date yet and i then started laughing at my
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brother said well that means you had to bid 22. like that was what are you talking why are you laughing at him like you somehow bid 22 it's our first date now that's because we we're all people who sort of think this way and so this
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sort of becomes the fun of the friendship but there are other people you know i think about friends is serving different purposes so i have like friends who i play tennis with and if you know i would never make a bet with them about whether their child was going to get into a certain university particularly if i was going to take the other side you know the side that they didn't want of the bet because i think that people can interpret that
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as you think that that's what's going to happen you know because we tend to you know these things settle to one or zero and so you know if if i were to get on the other side of that if i felt that the price was right
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i think that they could interpret that as me saying i think it's going to settle to zero um and i don't think that that's good for some friendships so i don't think that you need to bring everybody into your life into this type of thinking and you
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can understand that different people bring different types of value let's say you're betting on sports teams should you bet on your favorite team or should you bet on a team you hate to hedge your utility uh well okay so personally i i would only bet if i felt like i was getting the best of it but that being said i suppose uh i suppose there could be isolated situations like let's say so like i i'm an eagles fan so obviously it took a
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really really really really really long time for the eagles to win a super bowl when they did get to the super bowl it might make sense given the fact that i can have different values i can want to make money i can want to have
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an emotionally good feeling that's another way that i can experience a payoff um it might make sense for me to bet to bet the other side um just so that i'm kind of i get i get some happiness even if my team loses um i think when it comes to the
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eagles i don't know if that would be enough i'm not sure what the number was i would have to win where i would be happy that that team lost so i guess you'd have to figure out what that what that indifference point is um but yeah i mean i can see i mean i think that that's an important thing to think about right payoffs aren't always monetary they're sometimes emotional so uh sometimes you can hedge the emotional downside with the monetary upside
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and i guess you could figure out what the indifference point is but is there a limit to this process so i think a lot of people would be reluctant to bet on their own divorce no one would say well i've hedged my position on the other hand the exact same people are happy to buy life insurance and they think of that as noble right and they say oh well i've hedged my position i mean what's exactly the difference that accounts for the things we're
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reluctant to bet upon so oh that is such a great that's such a great question um so i think that there's a couple of things going on with that um i think a little bit of it is magical thinking which i'll get into in a second um
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i think a little bit of it is is this kind of strange thing about hedges that we're we're obviously hoping that we never have to use them so uh when we do i think that often uh then in some ways we're happy and then when we don't have
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to use them i think we're sad that we had those positions on in the first place so i kind of what i think is that there's certain things there's certain things about us and certain beliefs that we have that are very very central to our identity so when we think about something like fire insurance on our house you know what home we live in in terms of that kind of choice and whether it actually burns down that feels like very much like a matter
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of luck that's happened to us and so we're allowed to kind of offload that so i think it's easier for us to head against it because we're not feeling like um that we did anything to make the bad thing happen and so it gets sort of out of the emotional space because we can kind of offload it to luck but when we're talking about something like our marriage now it has to do with like what's our commitment what's the commitment that that person has
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to us and that now goes into this area of things that we're making decisions about things that have to do with who we are personally and i don't think we like to hedge very much against our identity um and i and i think that on top so so
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i think that on top of not wanting to hedge against their identity because we think of our identity as very categorical and very like that really gets into that emotional space about who we are but i think that on top of that we have
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this kind of idea and and this goes into some of my quibbles with things like the power of positive thinking which ultimately sort of realizes into the secret that we have this idea that if we do hedge against something that somehow if the bad thing happens we caused it and this is particularly problematic in in situations that do have very high emotional valence so you know i mean obviously the the head the hedge that you would put on
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on your marriage is to have a prenup and we we know that only about five percent of married couples end up with a prenup and people are very emotional about that and they're very against it i think because they say like are you predicting i'm
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gonna fail it's a little bit like the betting problem right are you gonna am i gonna bet with you about whether your child gets into princeton that um if you have a prenup that it feels like not only are you predicting
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that you're going to fail but then if the failure happens that perhaps you caused it in kind of a magical thinking kind of way but this goes into this category of like how can you be a good decision maker if you're not really thinking about
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the negative outcomes that could occur and then trying to get out in front of those in a variety of ways one of which might be to hedge and one of the issues that i have with the the literature and the power of
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positive thinking which i think ultimately expresses itself through the book the secret are you familiar with the book the secret yes okay so i think it like ultimately expresses itself through the secret is that it's this idea that if you
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imagine success it shall happen and if you imagine failure that that also shall happen and what the mechanism of that is unclear and of course the secret ends up positing this very strange you know this really cooking mechanism which is like
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your thoughts have magnetic power that actually attract the things that you're thinking about to you so if you think about a traffic jam you'll end up in one which is obviously really kooky but i think that that's kind of how the human mind works if i enter into a marriage and i do put the hedge on which is a preena i think that that the way that our minds work it says okay now i'm going to cause that to happen that somehow that's saying
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that i think it's going to happen and i'm going to cause it to happen as opposed to just saying there's all sorts of negative roots that your life can and you're more likely to have success if you can think about what those roots are and actually get out in front of them i'm not a gambler myself and i don't understand gambling very well but maybe you can explain it to me i read an article in the paper today that many gamblers are now betting on
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shark migration patterns because a lot of the horse races are shut down dog races are not running shark migration patterns that seems to me also a zero-sum game why don't you all just bet on equities which at least we hope is a positive some game like why do these zero-sum games exist when there's this one huge really quite liquid positive some game and i can get as excited about a company is about a horse right yeah so well first of all i
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haven't played poker since 2012 so like i'm definitely not betting on shark migration patterns over here um you know i mean i think i think you know i mean one of the things that i used to say about poker was that um you better not be willing to be a
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poker player unless you want people to endlessly discuss golf propositions so a lot of poker players play golf and um they're always like trying to figure out like how many strokes aside and are we playing a nasa or scramble or
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whatever and there's endless conversation because they basically want to turn everything into making a market um detached i you know i don't i don't know that it's i think they just like the action and i think that to your point about the
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zero sumness of it all i think they really i think they really want to say like if you state a belief i might be on the other side of that and there's going to be some price at which we can find a place where you're willing to take one
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side and unwilling to the other and let's do that price discovery and then let's get on opposite sides of that bet and let's just test out those beliefs and i think it's it's just a particular mindset and they become somewhat detached to i think they become somewhat detached from sort of whether that's zero sum or not now i think that you may know that there's actually quite a bit of crossover between people who are trading equities and
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poker players there's lots and lots of poker players who have have become options traders for example or people who are trading um financial instruments there's there's people who go the other direction who are in the in in finance who then transition to to um to poker and i i think it's because the minds work really similarly um you know so you know i'm sure that what happened was somebody found read something about shark
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migration patterns you know said it out loud to a bunch of people who play poker and immediately they started making a market you know in the same way that my brother and my brother-in-law did if gamblers because prices it's fun if
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gamblers cultivate detachment to be better at gambling and not so emotional about it does that mean when they win they're not that happy like how does a gambler stay happy and stay rational at the same time isn't there a trade-off
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that if you enjoy risk for its own sake you'll go broke but if you don't enjoy risk for its own sake what are you doing playing these zero-sum games yeah so um [Music] you know you know the thing about poker that i think is really interesting
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is that i think it actually is a very small group who actually figure out a way to be happy and i think it has to do with what exactly is it that you're trying to get out of the game so i think that the people who find a way
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to be really happy are the ones who are really interested in trying to figure out how to solve the problem of making decisions under that kind of uncertainty and how are you actually how are you actually figuring out given
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given the environment that you're in and the information that you have how do i build a really good model of my opponent how do i figure out given my model of my opponent what the appropriate line is to play and you become somewhat
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i think in that case indifferent to the winner the loss and it's really about it's really about the game itself and solving the problem of the game but i think that that's actually a relatively small handful of people who are playing poker i think that one of the things that that's kind of hard uh about poker is that it's one of the only places where you're actually i'm like looking at you and putting my hand out when we have a
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transaction that you're on the wrong end of and you have to actually put that money like in my hand face to face in person and not only that but in order for poker to really be fun in general people have to be playing
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for an amount of money that matters to them so by definition when you lose you're having to do lose in this very personal way where you're actually handing the money to me directly and it's by definition the amount of money that really matters to you
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and i think that that can actually make people pretty sad and if you're sitting at a poker table you're like oh yeah loss aversion is definitely like yes i mean it you you just see these examples of it all the time where
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there's this huge asymmetry between how sad people are when they lose versus how happy they are when they win and you know i think it's one of those things that unless you're really focused on process and i think this is a lesson sort of
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like for for all of life right like the way to happiness is to focus on process and then the winning sort of becomes a you know sort of secondary to that it becomes a way to keep score on on how you're doing on the process piece
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and to really focus on that as a as opposed to focusing on the end result which is what what does the chip exchange look like at the end of the day i think if you can't do that i think that you're just not going to be happy playing
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playing the game what frankly you most happy about poker other than just winning of course but the process yeah you know so i think there's a few things that made me really happy when i was playing i think one thing is you know i had come
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out of this phd program in cognitive science where i was really studying learning and poker is just a different way to study that topic that's really really powerful as a laboratory for thinking about human decision making
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not just about the way that other people make decisions but it really kind of exposes you to the way that you're thinking and and in a real way how hard it is to avoid decision traps even when you're perfectly well aware that those decision
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traps exist and how easily how easily it is for how easy it is for like your mind to slip into those traps like you know as an example like i went into that environment knowing full well about self-serving bias that
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that we tend to attribute good things to our own skill and we tend to attribute bad things that happen to us to luck and and i knew that that thing existed like i had studied it and yet when i was at the table it's so easy to convince yourself that you've lost because of bad luck and you've won because you made great decisions and and you're just sort of rinsing and repeating so one of the things that i really loved about the game was the way it
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sort of exposed that to yourself in a way that you in a lot of ways it was kind of hard to hide from because if you if you weren't seeing that clearly you were going to lose and so not only did it kind of expose that but then you had to start to figure
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out like okay so how how can i at least reduce the impact of that which was an ongoing self-discovery process um of trying to figure out how how to reduce the impact of cognitive bias that was really interesting and
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then the other thing that i i think i really really loved about the game was that it happens to be one of those games that reveals itself to you as you go along what you think the game is and what you think you know about it on the first day that you play is really different than what the game has revealed to you like by a year in and even like 10 years in it's it's totally revealing new things to you um so it just doesn't get stale it's
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like this constant process of like learning and discovery and trying to understand like this really really really complex system and how do i actually kind of get get myself into a position where i can actually win despite
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the uncertainty and despite my own sort of frailties of mind do you think very good poker players make better decisions than average in the other parts of their lives like is there transfer of learning or are they just sort of unhappy train wrecks
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you know my intuition is that it kind of depends again i think that there's this handful of players who are very process driven and i think that for those players it does indeed transfer um but i know i mean it's just so easy for me to recall examples of people where there was literally no transfer like like the number of people were where they're you know you were definitely not seeing it translate into their personal life like
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like just as a really simple example you could see someone who was like a really really really good poker player and they'd be they'd be really crushing it at the table and then the next minute they'd be out in the casino
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which is obviously negative expectancy like just dumping a bunch of money at the craps table or the back row table and it would be very confusing like what was happening there like why were you so good in this one domain and then suddenly you were
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making these really terrible decisions in this other domain so i i do think that one of the things that poker teaches you is that like you shouldn't assume that just because people are really skillful in one domain that
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that's going to transfer um because i think that that i think that that ability can be can be very very domain specific when you play poker with your brother and sister how much does the actual choruses play reflect real life family dynamics
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well uh they're also famous poker players right well some no my sister my sister is actually a she's a writer so but you're a writer too yeah so but she does play a little bit of poker um that's interesting um how much do they
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actually i think quite a bit it's quite a bit of psychodrama so so my sister is much quite a bit younger than me and my brother um and i think that that definitely expresses itself at poker like i i think that you know just just in sort of
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the way that that she plays i think that that dynamic of like younger sister comes into play and then i'm actually younger sister to my brother and when i was growing up um i we used to actually play a lot of cards with my
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father and i kind of idolized the way that they played like my dad and my brother but then i would also get very mad when i lose um to them and i would say that that definitely translates as well your father does do you have a favorite
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allopropism or pun or is that not for you oh my gosh no that is definitely my dad's domain uh i i think that in some ways i might have been scarred by all the punting that was happening in the household so i'm gonna leave that
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with my father that being said i will recommend to everybody that uh if you haven't read anguished english it's a really hilarious book your best known academic article on why children learn nouns more efficiently than they do
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verbs in a nutshell what is that okay so oh my gosh okay we'll have psycho-linguistics right right yeah so let me first of all give a shout-out to lila gleitman who is was my advisor she's 90. i actually just talked to her the other day
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um and she's amazing amazing intellectual but all right so how wonky do you want me to get that's the question that's wonky yes you wish too okay so uh so back when i was in graduate school there were kind of like competing
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theories just as a fun fact uh the person who was kind of on the other side of the argument with steven pinker who i'm sure that everybody is familiar with um so essentially stephen pinker was and he you know it's not as dichotomous anymore but at the time people sort of felt like it was either one thing or the other and and what pinker was arguing was that the way that children learn language is um they learn what a bunch of words mean
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and then from the words that they learn they then can bootstrap the syntax the grammar of the language because we know that they're you know german has a different grammatical structure than english does which has a different
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grammatical structure than say chinese um and so the question was how do you sort of figure out the grammar and and he was positing that you do it from learning so the meanings of some words and then you work backwards to the grammar uh that was called semantic
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bootstrapping my advisor was on the other side of the that argument which was that actually you learn the syntax of the language and then that allows you to bootstrap the meaning of the words so that would be syntactic bootstrapping
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um some of the the evidence for that would be that um when there are a lot of cases where kids wouldn't have any input of a like a fluid grammatical language and they invent their own grammar that's totally grammatical
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within what's possible within human grammars even though they haven't had any grammar inputted to them so the two examples of that would be uh there was a trend back in the 70s to not allow kids who couldn't hear to actually learn american sign language so they were being forced to lip read those children invented their own sign language and it looked very much like a regular natural language and then another example would be there
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are pigeon languages where two groups come together who speak different languages the adults have to communicate with each other they basically communicate like you know tyler you bottle take right like it's not really
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grammatical but the kids actually the children of those speakers create what's called a creole and that is actually a fully grammatical language that fits in with the rules of natural language so the idea is that the grammar itself is already we're sort
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of born with the syntax and then you use the syntax to figure out the words so the study that you're talking about we basically said all right well let's figure it out and what we found was that some pretty simple nouns like dog
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you can actually pick up from the environment without the syntax but uh nouns that had that that are not about concrete things out in the world like dog you actually can't really get so a noun like um thought would be hard like what is
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thought how can you see that you can't point to it but you can point to dog and people will figure out what dog means but verbs actually to do unless you actually have the grammar to support it so it turns out like kind of everybody was right that the idea is that you learn a few basic nouns like dog that helps you then figure out something about the grammar that you happen to be born into and then once you have that grammatical structure it
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allows you to start bootstrapping very quickly all the other words that was really wonky but you asked so when you beat people at poker to what extent are you winning because you read their language better because you've studied psycholinguistics
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pretty much not at all um so mostly what you're doing when you're playing poker is that uh you're really just trying to build a model of your opponent and most of what you're building have to do with things like
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uh what's the frequency with which they enter pots um when they do enter a pot in general sort of over time you start to figure out what the range of hands that they would be playing in different positions for them like what what's it what's a playable hand so that you can sort of narrow you can sort of throw out some possibilities and start to narrow down those ranges you don't have perfect poker faces for getting use of the expression
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you can't look at them and feel well i think this person's bluffing no they definitely don't have perfect poker faces but um so let me put it this way most of the time in poker the the the market's really wide so so uh
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all right so let me figure out how to explain this okay so tells things like you know let me look into you know let me look at your eyes and see what you're doing um there people definitely show them but it's not necessarily the most reliable
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information particularly because in order to pick the tell up you have to be staring at the human being and human beings in general don't like to be stared at so their opponent they don't like to be beaten neither right except that the problem is that really what you're picking up so when people are bluffing they're uncomfortable and so when you're sort of seeing these these physical tells from them what you're seeing is signs of discomfort
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but if you stare at somebody too long they'll be uncomfortable and so you're sometimes when you see some of these things you're not exactly sure is that they're just uncomfortable because i'm staring at them or are they
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uncomfortable because they they're bluffing and they're not comfortable that they're bluffing so that's all i'm saying it's like there's there's a little bit there's like there's noise in in poker health so but if you're right 51 of the time
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right so that's exactly right so the reason why you use towels that when you would use towels is when the decision is very close they would use towels as a way to sort of tip you from one side or the other so uh so so what i mean by that is like let's say that a situation comes up where um the pot is laying you like three to one so if the pot's laying you three to one you only have to win the hand 25 of the time and that's actually a
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relatively low bar like if i'm playing only against one other person like the chances that i'm going to win over 25 of the time are pretty good so i don't actually have to think too hard in that situation about whether whether i should play that hand but
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sometimes you get into a situation where um i have to win the pot 25 percent of the time and that's actually right around where my market is sitting like i'm like oh that's pretty close then tells can come in handy because
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there's sort of extra information that that can allow you to tip over onto one side or the other of your decision can you read men better or women better i think in general i would say that i can probably read i can read men better and i my understanding is that that's also true of men that the data is that men can read men better than they can read women and women can also read men better than they can read women i i'm not totally sure about the
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second part but um i'm pretty sure about the first part that men have an easier time reading men than they do women um the other thing what's wrong with us what's wrong with we men are we too vain are we boastful are we too sloppy with
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our countenances in my case right in my case it could be that only three percent of people who play play poker at the level that i was playing are women so i just had a lot more experience reading men which could be what it was
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um so that's possible um no i think there i think that there's you know i it's been so long since i read that literature but but i think that um men more reliably show that information but i feel like it's been so long since i read that literature i don't know that i have anything that would be valid to say about it let's try some rapid fire questions with quick answers first one new hampshire or vermont oh new hampshire i mean i grew up in new
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hampshire i have to be loyal but vermont's prettier why is new hampshire better because i grew up there like i have to be loyal to my home state also i just like to say lake winnipesaukee is pretty awesomely beautiful contract
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major blackjack oh for me contract bridge why you know black i think that blackjack is kind of boring it's very rote i mean you know if you're not counting if you're not actually counting the cards you know you're really just
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kind of playing basic strategy which means that there aren't really a lot of decisions that that are to be made that wouldn't be pre-made like it's not like a fluid game where you're having to adjust kind of like what's happening around you like you can literally someone you can walk into the scene cause you know someone can hand you a little card and you can follow that card right which is isn't very and then if you're if you're counting
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the cards just kind of like more complex but it's still very rote so you know with bridge it's like gosh bridge is so amazing it's like how how how are you thinking about the way that you're playing your cards and just in
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order to figure out where the king is sitting right or the aces it right like oh i love that game option futures oh well for me options just because like i i think i understand them better with what i understand more what's the best song
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oh i want to say you know just smells like team spirit but it seems so cliche but it's just like such a it's such a great song but you know i just love you know the mtv unplugged that nirvana did can you just like pick that whole album
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like i love it when they went when you know it's acoustic with like kurt cobain's just like singing like i'm just going to take that whole album and say like that version of all of those songs is so incredible i think terrorism would
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be my single song is joan rivers funny uh i mean i think that her act was funny in 2009 you're on celebrity apprentice with joan rivers and donald trump picked joan rivers over you what's your model for how that happened yes she's more famous than i am and it was called celebrity apprentice so you know it was funny because so i had a bunch of people after that say to me well that was really unfair and they started ticking off like all the
36:58
supposed rules of the game like you raised more money you won more challenges like they were sort of as if that was the game that i was playing and prior when when i had gotten to you know in a heads-up situation with her when we
37:10
were the final two i you know there's a lag between when the show ends and when the winner gets picked and i was letting people know like oh just so you know i'm gonna lose and they were like no you're not and they would take off all these reasons
37:21
why i was going to win and i said but that's not the rules of the game it's like celebrity apprentice donald trump picks he's been friends with joan rivers forever and she's more famous than me i literally have no shot
37:32
and no matter what you think the rules are um those really aren't the rules because it's like reality tv and so he's just he's going to figure out a way to pick her and i you know i was pretty clear about that that actually i wasn't particularly
37:45
upset by it because i kind of understood that that was kind of the game that i was sitting in i was upset by other things but not by that i don't intend it as a political question but what was donald trump like um so basically probably whatever your viewpoint of him is now would be very true to what he was like in person does he have tells oh for sure yeah absolutely so you think you can one can just read him flat out in obvious ways
38:27
in some obvious ways yes i mean some tells some tells are very very uh easy to read and reliable so so i was talking about some of the more subtle tells like once you kind of get to the the expert level of poker
38:40
but like as an example like there's a very reliable tell when people are new to poker that i would use every single time like it would actually move my market by a lot if you did this so so as an example there's something when people are new to
38:51
poker um which is strong means weak and weak means strong so when a player like sort of like puffs themselves up and like takes their chip to bet and they really like they grab their chips and it's like a big motion and they sort
39:04
of like very forcefully put those chips into the pot if it's a new player they're almost always bluffing in that situation but if they like take their chips and they're like as gentle as a mouse they're like oh look i'm bedding don't
39:16
pay any attention to me i'm just gonna sort of quietly slide my chips into the pot it usually means that they're very strong now now that particular towel goes away pretty quickly so like when i was saying like tell it's very hard for
39:28
tells to like really move your market a lot i was i was talking about expert players but if you're talking about a beginning player tells can actually sort of make your market like they they're like they can really tell you
39:39
something incredibly significant um so yeah i mean i i feel like he's got some pretty strong pills if only poker players voted how would policies change how would politics how would the country be different it's not a question about party affiliate but about how poker players think because your reason for why you vote is going to matter more than which party you vote for if you're all the only voters so so i i you know i think that like i
40:12
need to understand what you mean by a poker player because there's all sorts of different types of people who play poker the top 500 poker players you although the country change um i think that do we make better because you've already
40:29
said these people are not necessarily better at happiness they don't necessarily transfer the learning would it just be the exact same country would we somehow take more clever risks in foreign policy would we read the tells of you know
40:41
putin yeah my suspicion so my suspicion is that if only the top 500 poker players voted um policies would people would be thinking a lot more about edge cases like where things could go wrong um for sure because pogo that's poker
41:00
players just are obsessed with that um i think that uh there'd be more long-term termism as opposed to short-termism again because you have to sort of be obsessed with that as a concept so i think that people would be thinking
41:13
about what are the unintended consequences like how does this look another thing like that's really important that poker players think about is if i put this policy and it looks like it's awesome how can someone come in and find the
41:24
cracks in it right so that so that it can turn into something bad um so i think that people would be thinking more i i feel like the top 500 players would definitely be thinking in that way more so assuming that they wanted to
41:39
use their powers for good as opposed to evil which we'll assume i feel like in general policies would be would be better less easy to be advantaged more thinking more long-term definitely more willing to take re you know risks that were worthwhile um yeah i mean i feel like things would be better say the top 500 people in finance were the only voters putting us on policy toward finance do you think it's basically the same answer
42:10
or somehow different well again i mean with both groups i'm assuming that they're trying to do good and not do right because obviously you can be thinking about any of this yes i i think that that is true as well why are there so many casino scenes
42:24
in american western movies and james bond movies gambling scenes baccarat you know i mean i think it's probably it's probably similar to the to the i feel like it's a little similar to um you know why do people play lotteries
42:42
and also sort of what is the image of like a gambler in america like first of all i think that america likes to think of itself as like really idolizing like risk takers um so i think it sort of shows like james
42:55
james bond is a risk taker but he's very smart but you know i think that you know a lot of it has an association of glamour with it which is pretty hilarious if you've ever seen people at a poker table um but uh you know i mean i think they
43:08
sort of think it's glamorous and then also i think that there's just a certain amount of fantasy like maybe i could be in that position and i could like win big or if i had enough money i'd bet that amount of money and i and i think it's fulfilling a lot of like there's like some wish fulfillment why has poker stayed culturally such an american game so if you go to macau it's not nearly as big a thing as it would be in the united states
43:34
what's the cultural barrier why is it not such a universal game that's it well so yeah so it's so funny because i i think about that i think about poker is a pretty universal game because when you know certainly when i was playing
43:51
there were you know there were you would be sitting at a table and there were people you know chinese vietnamese korean german french italian spanish russian right i mean it really kind of drew people from all over the world into the
44:09
game but i suppose maybe that it maybe drew them into whatever the american version of the game although there's the european poker tour and there is poker in macau an interesting question like i've always kind of thought of it as very
44:24
international but um if it's not and because obviously i'm thinking from the inside view right like i was living in poker which seemed like very multicultural when i was playing um if i went to a random get-together of
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taiwanese men in a mid-sized taiwanese city i would be shocked if they were playing poker maybe it's mahjong i'm not even sure some some other game with tiles some other form of betting whereas in the united states i wouldn't
44:55
be shocked by seeing poker anywhere yeah i guess that's true uh gosh i've really never thought about this um you know i think that i think that every i i every culture has some sort of form of gambling and for whatever reason
45:15
i feel you know this you know poker became sort of part of the lore of the old west you know it was a way that that we gambled but i don't know you can ask like are there people who who like for example mahjong are
45:36
there people who like make their living playing mahjong i don't even know i believe so i'm not not an expert in the matter but yes i think wherever there's gambling and that's an absurd gambling game because who's ever better is evident very quickly right
45:54
right which is why speed chess so speed chess allows you to feel like you got unlucky that's why the real money is made in speedchest um uh you know the the other thing of course is that i guess in chess you can negotiate
46:08
like you know you start with two pawns fewer than i i get you know so you can actually figure out whatever you can try to negotiate what the tipping point is same in golf yeah i'm just gonna have to say i don't know there i don't you know it
46:22
originated in france too so i don't i don't i don't know that's a really good question let's call it a stumper how smart are those like top 500 poker players just as humans oh they're they're i mean brilliant most of them
46:38
not not all of them but almost all of them are brilliant and that doesn't necessarily mean like they're they're incredibly well read i mean not all of them are um you know not all of them would have like sort of a traditional education but they're all
46:53
they're all ridiculously smart not all you think they could have done other wonderful things and there's some kind of potential social loss or being a poker player was the highest dedication and they have some kind of strange personality asymmetry or say they wouldn't have made a great ceo they couldn't have been an inventor couldn't have done this or that and like chess players they end up as poker players or are they multifaceted and it's some
47:20
kind of shame that they were not out there being great in some other role so i i think that there's certainly some hand you know some significant portion of them that that's true of that they could be doing great things out out in the world but i but i also think that there are quirks about people who are attracted to poker because i i think that given how brilliant they are and particularly how brilliant they are at game theory
47:44
um and sort of expressing that and instantiating that in like a real-time high-stakes decision-making problem i think that most of the people who are playing poker could be making more money doing something else um could be creating more
47:59
productivity for the world like you know sort of like as you said like moving out of this zero-sum situation into something that that's more uh win-win um but i think that there is something in general about who's attracted and
48:15
willing to sort of take a haircut to go play poker right in order to do that that has to do with the sense of sort of independence and not necessarily fitting in with what kind of the norms of society are so there's a story
48:28
about a very famous story about um there was a poker player really good poker player who decided that they wanted to actually try trading instead so they got a job um with a firm to go trade and the first day uh they didn't show up and they called
48:45
in at like i think 11 in the morning or something and said i'm sorry i i can't take this job it's just too early like they just they just would not they just didn't want to get up that early so they went back to playing poker and i do i do feel like that kind of encapsulates sort of like you know something about a certain group of poker players you probably know the case of the famous economist steve levitt he decided he would become a top poker
49:13
player within a very short period of time he did do you think most very smart people could do that or are they in turn lacking something that these top 500 poker players have yeah no i don't think that most just
49:27
sort of generally very smart people could do it i mean obviously what are they lacking well first of all i just want to take this moment to tell everybody to go get maria kanakova's new book the biggest bluff super smart phd in psychology decided
49:44
she was going to learn poker to try to understand uh uncertainty better and and the influence of luck in your life and managed to become a champion um and her book is a really wonderful sort of like it's like
49:55
a memoir but it's also a real meditation on on luck and uncertainty and its influence in your life and game theory and it's it's really an amazing book it actually just came out on tuesday um no i just because you're smart doesn't mean that you could
50:11
that you can become a great player i think that you have to be smart in a very particular way um and it would be the way that somebody like stephen levitt is smart or maria kanakova is smart i think that there's a certain
50:22
way yeah there's a certain feel i don't have it though i've never tried but what is the way what am i lacking people all those like me who would fat yeah i don't know that you would fail by the way i think that i think that if you
50:35
have the ability to to think probabilistically i would say that that's kind of number one is that you really really have to understand that uh seems like the easy part to me that i can do yeah no so but well but see that's the thing
50:50
is like that one thing you know i mean i i actually i actually co-founded uh the alliance for decision education partly because of that one thing that these this thing that we take for granted that has to do with thinking
51:03
probabilistically is not something that's really taught in k-12 uh it's not the way that people are trained to think um you can see it all the time like you know in 2016 trump you know i think he closed on 538 at something like between 30 and 35 to win and uh when he won people were like they were wrong that was ridiculous i mean you know and this is how like generally people think so so that core thing of like are you good at thinking
51:31
probabilistically is a bigger thing than you think and then i think on top of that um [Music] you have to be somebody who's really interested in understanding when the things you believe are inaccurate and you have to be like
51:47
so incredibly hungry um to collide with corrective information you have to be open-minded to the corrective information you have to be updating your beliefs constantly and like you i think that you just have to be willing to have less endowment to
52:03
your own beliefs and like hold those really loosely um because you have to keep this sort of end goal in mind right like i'm not trying to win this hand i mean i am but like i understand that there's all sorts of things that might intervene in my ability to do that i'm trying to win in the long run and the worst thing that i could find out is that i believe something was true and held on to that belief too long so it affected my bottom line
52:29
so i think that you just have to be thinking that way all the time and then you have to be willing to try to solve for it um and if you have those things i think that you can become really i i and you're smart i
52:43
i think that with in a pretty quick period of time you could become very good at that game let's say you take a player who plays regularly at a local casino does pretty well maybe he's in the top 5 or 10 of that group and has played for 10 years
52:59
you put that person down at a table with like a top 20 top 30 poker player i mean what's the difference what does the very players have that that individual would how would they beat him oh it's it's such a combination of things
53:20
uh you know i mean the way that i would i would think about it is if i took really successful trading options in 1982 and i put them into the environment that exists now where the market is like super super tight i wouldn't actually
53:37
expect them to be able to win and the reason is that when the markets are really wide uh you know your ability to be sort of leaving you know basis points on the table like you you just have so so much more room for like not getting
53:55
it just right because you're you know because the difference between you and and the people that you're trading against is so wide so yeah could you be if you were really concentrating and you were really working on on
54:09
getting better at modeling your opponent really understanding bet size like under understanding that like you always want to be trying to get on the primary line of play as opposed to the secondary line of play um that gets forced on you as the market's tightened but that person who's sitting in that game where they might be in the top 10 of their local casino they can be choosing the secondary line of play a lot and still be crushing the game
54:36
like once you get against the people who are who are real experts who have really kind of come up the ranks those people are at just such a higher percentage of the time they're choosing the primary line and when you're butting up against that on
54:49
the secondary line like you're good like you're coming up with a pretty good option but you're not you're just not coming up with the best option or not or you might be on the tertiary line like that might be okay if
54:57
the market's wide enough so and and how you're sort of figuring out what's the right choice in any given time it's like so many things go into that so you're just gonna like butt up against like oh that market just got
55:11
really tight on you is playing poker different when you're nine months pregnant yes you have to go to the bathroom a lot more so you miss a lot more hands the other thing is that honestly like when you're physically uncomfortable it
55:27
does affect the quality of your thinking like i i truly believe like you know when i was playing when i was nine months pregnant i was certainly not playing as well as when i was you know not nine months pregnant just cause you're like super physically
55:40
uncomfortable and you're also tired alcohol effect high level play in poker oh yes a lot you know it's kind of interesting like at the lower levels if you have somebody who um maybe isn't aggressive enough in their play
55:57
like they're a little bit too passive at the lower levels if you like give them a beer it would probably be helpful right because it would like it would like sort of get their courage up right and and in poker courage can get really rewarded but again the problem is that once once those markets like tighten and you know your opponents start to get a lot better uh alcohol would not be advised i would like that if my opponents were drinking
56:24
in the last 10 to 15 years what's the main thing we've learned from computers about playing poker that we didn't know before yeah so actually this is the place where i'm not the best person to answer and and the reason is that so i retired
56:38
in 2012 um and a lot of the stuff that's been done in terms of simulations has actually occurred in that period since i i retired so now people have access like maria konokova um a lot of the learning that she did was
56:53
was through being able to run these monte carlo you know simulations and and try to figure out uh you know through through through being able to run those simulations it's a lot easier to figure out what the game theory optimal choice would be um and those things we were sort of trying to figure out by feel you know or sometimes by hand um and so there's just like a whole bunch of really interesting plays that players are making now that i think
57:20
that we you know back in the day when we were sort of all doing it just sort of ourselves you know i don't know that we would have been able to come to them because they're not intuitive in the same way i think that backgammon
57:32
has changed a lot too like um the intuition about you know for somebody prior to being able to run all these simulations about how often you should be like leaving um a naked checker you know a shot um you would have been trying to cover
57:48
those a lot more you know back in the 90s but what the computer simulations have shown you is that you should actually be leaving those shots a lot more often than what your intuition might tell you and i think that there's a lot of
57:59
similar things in poker but honestly i can't really give you specifics because a lot of those changes occurred after the point that i retired which is really good for me by the way because i don't know how i would have
58:09
done in that environment i'm not sure that at this point i'd be willing to put in the work i i think if i if i tried to play poker today i would just get destroyed it's my opinion my last question before we turn to audience questions if you meet a young person maybe 18 or 20 and they tell you they want to become a top poker player and they're already quite good maybe you could imagine it i mean what signs do you look for in them
58:35
to judge whether they really have the talent temperament whatever it takes what do you look for you know i think the number one thing really honestly is like open-mindedness you know i mean i just think i just
58:54
think in order to really succeed at the top levels of the game you just have to be so open-minded you have to feel willing to ponder on a daily basis the idea that you might be wrong you know the idea that the things that you think to be true
59:11
or or what you think about an opponent that it just might be inaccurate and that it if you're not willing to kind of like ponder that which i think is difficult right like i mean it's not it's not the human brain isn't really built to
59:27
just be constantly thinking like where am i wrong where am i wrong where am i wrong like the human brain is built to go like i'm right i'm right i'm right um and i think it's kind of like it's it's kind of a hard thing to actually
59:40
to actually live to actually put into practice so i think that that's probably the number one thing that i would be looking for i mean obviously it would be if they're already successful i kind of already know they probably know the basics they're they're good with the math um you know they they certainly must have a feel for the game and you know skill in the game but then i would be looking at like how eager are they to learn and learn in this
1:00:02
particular way which is just always think thinking what did i do wrong you know there's there's a story about phil ivey that i think is so telling um about you know what it takes to be a great player where he won a really really huge
1:00:17
tournament and then he went to dinner and during the dinner all he talked about like he was just obsessed it's like all he talked about were the places where he felt like he didn't bet enough or he bet too little or a hand he shouldn't have
1:00:29
played or a hand he didn't play and he should have or the mistakes that he felt that he had made um playing that final table and this is someone who had just won a huge tournament who by all accounts at that time was like the best player in the world and i think it's so telling that that's what he was talking about right afterwards was just kicking apart like what are all the places where he was leaving equity on the table where he did he wasn't
1:00:51
grabbing what was sitting in front of him and trying to clean up around the edges of that and figure out all the mistakes that he made and i don't know that everybody is built for for that annie duke thank you very much for my
1:01:05
virtual applause thank you thank you those were such great questions oh good a lot of fun for me always it was great reading rereading all your work and videos and everything thank you i mean really that was really challenging thank you