The Exchanges

Q This is a family business for you guys, isn't it?

A It is a family business. Yeah. So, um, I think that nowadays people think, oh, I can see how someone would end up thinking they should go play poker because nowadays it's on television. And so everybody kind of knows that poker is a thing that you can do for a living because they see it on like ESPN. But, uh, for me at that time, this was in the mid nineties. Um, it was not on television. You were never going to crop, you know, sorry, You were never going to come across somebody who was like, hey, I'm a professional poker player. So it would have been, it was a very strange thing for me to end up doing because it wasn't something that was out in the public sphere as a way to make a living. Um, the only reason why I ended up getting into it was because my brother, when he was a teenager, had gotten really into chess. And I mean, into chess, like big books studying, you know, openings and moves and, You know, so on. And he, he found a grandmaster that he could study under in New York. Had gotten into Columbia, decided to defer a year to go and study with this grandmaster before starting college. And in that year, uh, got connected into the games world in New York. So, you know, it's chess and backgammon and poker. They're all very interconnected. Um, so he started playing poker. And in that first year, he Lost his college fund, which was about 6300 dollars, but righted the ship p…

AI assessment note: “It is a family business. Yeah.”

Q maybe organizations is in poker you're making very individual decisions. You're the person making the decision. You're responsible and accountable for those outcomes. Those lines in organizations tend to blur in the sense of sometimes you're responsible for implementing somebody else's decision. Sometimes they're responsible for implementing yours. And sometimes you come to decisions as a group instead of an individual How does that affect how you think about this?

A Well, first of all, I think that the process for coming to what the right decision is, um, can be similar regardless, because what I was doing was certainly in the moment I was making my own decisions, but it was my responsibility to go talk to the people who were my peers that I was trying to learn with and work through and deconstruct those decisions and talk about strategically what I might be doing in the future. So in some sense, that's a similar problem, right? I have to go execute on my own. But I'm interacting with a group in order to try to figure out what my best strategic plan is. And I think that that's actually, in large sense, very similar. Um, that being said, obviously, it would be really nice if I could go through a group decision-making exercise at the table, but that would be bad because it's one player to a hand, and you need to play on your own. So, um, but I actually don't think that it's that dissimilar, and I think that you can sort of view as a leader the same thing, that yes, the person has to go execute on their own, But it's my job as a leader to have worked through what the process is and what the strategy is with that person before they go off and execute so that we're all bought in. And they, and I understand what their reasoning is. They know that I've bought into the process. They understand that I know that there's some probability that it does…

AI assessment note: “I think that the process for coming to what the right decision is, can be similar”

Q Talk to me a little bit about the role of emotions and how they affect your decisions, not only in poker, but I mean, in real life, but is there anything particular to poker that it, it highlights or accentuates?

A So I think that, um, one of the reasons why poker is a kind of interesting place to look at the role of emotion in decision making is because there's a lot of emotion. And one of the reasons why is that, uh, one of the things that gets us really emotional is what is the most recent path that we've taken in terms of what our outcomes look like. So what I talk about is that in poker you have this advantage, which is that because we have this constant exchange of chips, right, I make a decision, chips go either toward me or away from me, that, um, you can see very clearly at every moment that every single decision that you make, even these little tiny executional ones, Actually have consequences. That, uh, the executional decisions really matter to what your bottom line is because you're seeing this, you know, you're not seeing sort of the end result. You're seeing the upticks and downticks, right? So I think that that's, I think in general that's good for making you understand this idea that every decision that you make has some risk to it and you should be treating it like that. But it's bad from the emotional standpoint because you're getting yanked around by the ticker. So if you, if you are holding a stock and you've decided that you're going to, it's a long-term hold, it's not good every hour to go look at how the stock is doing. You're going to have like a really unhappy li…

AI assessment note: “one of the reasons why poker is a kind of interesting place to look”

Q organizations is in poker, you're making very individual decisions. You're the person making the decision. You're responsible and accountable for those outcomes. Those lines in organizations tend to blur in the sense of sometimes you're responsible for implementing somebody else's decision. Sometimes they're responsible for implementing yours. And sometimes you come to decisions as a group instead of an individual decision. How does that affect how you think about this?

A Well, first of all, I think that the, the process for coming to what the right decision is, um, can be similar regardless, because what I was doing was certainly in the moment I was making my own decisions, but it was my responsibility to go talk to the people who were my peers that I was trying to learn with and work through and deconstruct those decisions and talk about strategically what I might be doing in the future. So in some sense, that's a similar problem, right? I have to go execute on my own. But I'm interacting with a group in order to try to figure out what my best strategic plan is. And I think that that's actually, in large sense, very similar. Um, that being said, obviously, it would be really nice if I could go through a group decision-making exercise at the table, but that would be bad because it's one player to a hand, and you need to play on your own. So, um, but I actually don't think that it's that dissimilar, and I think that you can sort of view as a leader the same thing, that yes, the person has to go execute on their own, But it's my job as a leader to have worked through what the process is and what the strategy is with that person before they go off and execute, so that we're all bought in. And they, and I understand what their reasoning is. They know that I've bought into the process. They understand that I know that there's some probability that i…

AI assessment note: “the process for coming to what the right decision is, um, can be similar regardless”

Q Or internally in organizations, right? Not knowing what to do or being uncertain about it can often confront your view as a knowledge worker, your view as a leader. Um, you feel like you'll lose respect from the people around you, and you might.

A Right. I think that there's a difference between when, you know, a candidate has to express it to the general public, right? Particularly when that public can't talk back, and you as a leader in a room with the people that you're working with. And being able to model that kind of behavior, I think, is gonna cause people to respect you more, and it's gonna cause them to share back with you and see that the process is better, and you're gonna be considered more believable because you've put thought into the process. Um, I think you're also expressing to them that you value your, their opinions as well. So yeah, I understand that when a political candidate is talking to, uh, a hundred million people, that there isn't time to waffle. You, you have to just say that you know things for sure, which by the way, I think is a shame.

AI assessment note: “being able to model that kind of behavior, I think, is gonna cause people to respect you more”

Q Because they're overconfident, they're prone to taking risks that they shouldn't be taking, or why is that?

A Well, I think that they're, I think that it's a few things. I think one is that once they know about the bias, then they're overconfident, they're overconfident in thinking that they're avoiding things like overconfidence. Um, but two is that the smarter you are, the better you are at kind of slicing and dicing the data, um, in order to fit whatever your prior is, and you can slice and Dice it to tell a story that doesn't sound biased. So you'll say things like, you know, I was really trying to think, though, if this was just me rationalizing my prior belief, and I've come to the conclusion, no, and here's why. And when you're, you know, when you're really adept at that kind of spin, which you have to be more intelligent to be able to do, you can actually cut the data in a way or present, present it in a way that really fits the story that you want. You're just better at it. And it's not that you're lying, by the way, you're just better at fooling yourself. So, um, you know, when you talk to somebody like, uh, you know, Phil Tetlock, for example, I mean, he, you know, he's just very skeptical, John Haidt, they're all very skeptical that you can do much about this on your own, um, and that you really need to be in a good group in order to overcome this kind of bias, and I, I think that the re, it's, it's very actually intuitive to think about why that is. When you're looking at …

AI assessment note: “I think that it's a few things. I think one is that once they know”

Q It's because there's more downside than upside, right? In most scenarios, like in this case, if you get there one minute early, it's not because you're a genius in this route, right? And, but if you don't get there on time, then you, you, You know, it was Keynes who said it's better to fail conventionally than succeed unconventionally, I believe.

A So I think that in any given try, There's more downside than upside. Yes. I think that on one trial, not in the long run, because you miss the paradigm shifts. You miss the ability to make really big changes. And that's true in your life also, by the way. If you're afraid of trying new things, of changing your career, because if it doesn't work out, you're going to be really sad, and you would rather have it not work out by staying in the crappy job that you don't like. Right, I mean, that, that's, you're resulting yourself there, and you're refusing to make a change or make an innovative choice because you're, you're afraid of the downside, and that can have really bad long-term consequences. I mean, I can tell you there were lots of, there were many moments in poker where through these kinds of conversations that I was having with people, I thought, you know what, I think that this way that I've been playing in these particular situations, I think there might be a different way to do it. And I understood going in that I was probably gonna lose at first because I wasn't used to the strategy. I was sort of trying it out. I was trying to figure out when should I apply it? When shouldn't I? What, what are the right moments? Exactly how should I execute on this? And I understood that there, that I wasn't going to do so well necessarily because I was trying something innovative, bu…

AI assessment note: “I think that in any given try, There's more downside than upside. Yes.”

Q Let's get into decision making in poker, but I want to start with kind of like, how do the stakes affect your decision making process, or, and within that, kind of the context of being on television or not on television?

A So let me start with the stakes. Um, the ideal in poker would be that the stakes don't matter except in as much as your opponents play differently depending on what stakes you're playing at. So when you're playing at lower stakes, your opponents tend to be more beginners. When you're playing at really high stakes, they tend to be more advanced. Um, what I used to say is that the players who aren't so good at the beginner levels or the advanced levels They're, they're both not good, but they're not good in different ways. So at the lower levels, they tend to be more passive. They tend to be doing more just sort of calling. At the higher levels, the players who aren't so good tend to be more raising. They tend to be sort of overly aggressive. So that, that's just sort of a general, it's not true of everybody. Obviously we're talking about averages here, but on average that would be true. So that should be the only reason that the stakes are affecting you is that when your opponents are making different choices, you obviously should be adjusting your strategy and To try to come up with the optimal strategy against the choices that your opponent is making. Now, that's not what happens. Um, as you move up in stakes, um, it does change the way people play. In particular, uh, when the money matters more. So when the money really matters to people, one of two things happens.

AI assessment note: “So let me start with the stakes. Um, the ideal in poker would be”

Q Let's talk a little bit about how your study of psychology influenced your poker playing. I mean, how did you learn, how, how did what you learn in that world carry over to the poker table and gambling?

A Well, here, here's something that I think is really interesting is that I, I actually have lots to say about that now, but I think that that all revealed itself to me later as I went along. I think that it particularly revealed itself to me, um, when I started talking on these topics that really eventually ended up as Thinking in Bets is the book. Um, I started talking on these topics in 2002, and I started realizing how much of what I had done in graduate school had That informed, um, what I was doing at the poker table. Now, one of the interesting things is that when you say that you studied psychology or went to graduate school in psychology, people think that you're talking about clinical psychology, and so people actually think, oh, you must know a lot about people's, like, personalities in the sense of, you know, depressed or, uh, you know, I'm gonna do psycho, you know, analysis on you or something like that, but most of what psychology is is actually in this space of experimental psychology. Clinical psychology is a very small slice of it, And I don't know very much about clinical psychology. What I know about is cognition. So what I realized is that all of the work that I'd done in, um, really understanding how people make decisions, cognitive bias, how do people construct mental models of the world, how do people learn in really uncertain systems, which is really what…

AI assessment note: “understanding how people make decisions, cognitive bias, how do people construct mental models”

Q How do we create better mental models? Or I guess maybe this comes to learning in terms of updating our existing models so that we get the feedback, like there's people who are playing poker and losing, but they never seem to get the message. What was different about you? How was your learning process?

A Well, I think that I was, I think that I was really lucky in, in the sense of, well, I mean, it's kind of interesting, because I wouldn't have become a professional poker player if my brother hadn't brought me into it. And my brother had already landed in this group of incredible players that, uh, among them have many, many, many world championships. I mean, they all went on to be top performers, in particular, someone named Eric Seidel, who has, uh, You know, a bunch of world series of poker bracelets. He, I mean, a big poker champion. He's earned thirty-eight million dollars playing poker. He is amazing. And he's also, uh, one of the most rational and clear thinkers that I have ever come across. And so I would say that I was very lucky to be plugged into that group. Of course, I, it's weird because I wouldn't have been playing poker if it weren't for that group, but.

AI assessment note: “I was very lucky to be plugged into that group.”

Q What information would you require from somebody else to, or would you want from somebody else to judge the quality of their decision, not knowing the outcome?

A Well, I think it depends on what the decision is. Um, what I think is really important that you bring up is that there is, that there are details that I need to have. Um, and I think that you have to think for yourself, um, In whatever you're doing, and you can work this through with a group of people who are also experts in whatever you're doing, or trying to become experts in what you're doing, or what are the details that you always need in order to construct a good decision, because you know that for yourself better than I do. I can tell you from poker, for example, there's all sorts of details that I need.

AI assessment note: “Well, I think it depends on what the decision is.”

Q What information would you require from somebody else to, or would you want from somebody else to judge the quality of their decision, not knowing the outcome?

A Well, I think it depends on what the decision is. Um, what I think is really important that you bring up is that there is, that there are details that I need to have. Um, and I think that you have to think for yourself, um, In whatever you're doing, and you can work this through with a group of people who are also experts in whatever you're doing, or trying to become experts in what you're doing, or what are the details that you always need in order to construct a good decision, because you know that for yourself better than I do. I can tell you from poker, for example, there's all sorts of details that I need.

AI assessment note: “Well, I think it depends on what the decision is.”