Browse Archives

By Category

By Date

About Amit Varma

Amit Varma is a writer based in Mumbai. He worked in journalism for over a decade, and won the Bastiat Prize for Journalism in 2007. His bestselling novel, My Friend Sancho, was published in 2009. He is best known for his blog, India Uncut. His current project is a non-fiction book about the lack of personal and economic freedoms in post-Independence India.




Bastiat Prize 2007 Winner

Recent entries

Searching For Macho

This is the 46th installment of Rhyme and Reason, my weekly set of limericks for the Sunday Times of India…

Immortal Mishtake

This is the 45th installment of Rhyme and Reason, my weekly set of limericks for the Sunday Times of India…

Misogyny is the Oldest Indian Tradition

This is the 40th installment of Lighthouse, my monthly column for BLink, a supplement of the Hindu Business Line. Early…

Beware of the Useful Idiots

This editorial by me appeared today in Pragati. Many of the intellectuals who supported Narendra Modi in 2014 should have…

Bollywood Explains Economics

A few weeks ago, I started a new section in Pragati, the online magazine I edit, called Housefull Economics. The…

15 January, 2015

Poker at Lake Wobegon

This is the 33rd installment of my fortnightly poker column in the Economic Times, Range Rover.

One of the ironies of poker is that at a nine-handed poker table, all nine players believe that they are profitable, if not the best player at the table. This obviously cannot be the case. Poker is a negative-sum game: the rake takes a percentage of each pot or tournament, and winners win less than what losers lose. Also, easily more than 90% of players are long-term losers, and most of the winners are just marginal winners. So what’s going on here?

I have two answers for you: 1. The nature of poker as a game. 2. Human nature itself. Let’s get the easy one out of the way.

Every game contains differing elements of luck, and although poker is unquestionably a game of skill, the quantum of luck in it is far higher than in other games. A winning player’s edge translates into a profit only in the long-term. Over a short span of time, it is difficult to tell from results who is the fish and who the shark. Losers win their fair share of pots and tournaments, which fosters the belief that they are better than they really are. But their flawed self-assessment is a consequence not just of the nature of poker, but of human nature itself.

A few decades ago, the writer Garrison Keillor created a fictional town named Lake Wobegon, where, he wrote, “all the women are strong, all the men are good looking, and all the children are above average.” This gave its name to the Lake Wobegon Effect, also known as Illusory Superiority, a tendency humans have of overestimating their abilities. This tendency crops ups across contexts: in studies, people have been known to overestimate their driving skills (everyone can’t be above average) and terminally ill cancer patients have also, poignantly, overestimated their chances of survival.

You will see the Lake Wobegon Effect in poker, as also its sister, the Dunning-Kruger Effect. Wikipedia defines the Dunning-Kruger Effect as ‘a cognitive bias wherein unskilled individuals suffer from illusory superiority, mistakenly rating their ability much higher than is accurate. This bias is attributed to a metacognitive inability of the unskilled to recognize their ineptitude.’

In the context of poker, a player may think he is better than he is because he lacks understanding of the game, or the intellectual tools to perceive his own weaknesses. I see this around me in many players. They don’t understand the long-term nature of the game, focus only on their own hand and don’t think in terms of ranges or equities, are results-oriented rather than process-oriented, and consider pots they win to be a validation of their skill while attributing their losses to bad luck. Some of these guys avoid putting in the hard work to get better, and rationalise this sloth; some of them are simply not capable of improving. This is not a defect in character any more than being human is.

How can you guard against the Lake Wobegon Effect and the Dunning-Kruger Effect in yourself? Here are two things you can do. One, always ask yourself what your edge is in any game you go to. If you can’t define this precisely in terms of how you are exploiting the specific weaknesses of others, you don’t have an edge. Two, keep track of all your scores, and see how much money you make over a decent sample size of sessions. Your brain might deceive you—but the numbers won’t lie.

Copyright (C) India Uncut - http://indiauncut.com
All rights reserved. Do not reproduce without permission. Email: amitblogs@gmail.com
This article is permanently archived at:
http://indiauncut.com/iublog/article/poker-at-lake-wobegon/

Commenting is not available in this weblog entry.