This is the 15th installment of my weekly poker column in the Economic Times, Range Rover.
An epic battle took place a couple of days ago at a local game I play. A gentleman I shall call Fearless Builder was raising blind every hand to 8bb. He’d get two or three callers, and then the guy to his right, Action Builder, who had limped earlier, would make it 50bb, also blind. Fearless would call blind, and then the table had to decide what to do. We were all waiting for hands to take them on – anything ahead of their obviously wide blind ranges – and an affable chap at the table, who I shall call Persian Emperor, started getting cards.
He had KQo one hand, stack of 250bb, he ripped it in. Both Action and Fearless called blind. Action had K6o, Fearless had T6o. Fearless won. Emperor rebought for 250bb. An orbit later, same scenario, he was all in with JJ. Fearless called blind with 89o, hit two pair, took it down. Another orbit later, Emperor gets in 300bb with KK. Action and Fearless call blind. Flop is J94r. Action shoves blind for side pot, Fearless calls blind, another 400bb each. Action flips over 84o. Fearless shows 22. Emperor sighs in relief. Turn 2. River 2. The table erupts.
Emperor gets up to go. ‘Can’t believe how bad I’m running,’ he says. ‘No point playing any more.’ Fearless, who was down 500bb when he started playing blind and is now up 2000bb, says, ‘I can’t believe how good I’m running. I should go buy a lottery ticket.’ Their sentiment is understandable – Emperor did run bad and Fearless ran like God – but the conclusions they drew from this is flawed. Both might have been joking, of course, but I have heard too many people speak in terms on running good (or bad) in the present continuous sense, as if a narrative has been set for their session by some higher power, and they’ve managed to identify it and must adjust. ‘I’m running good today so I’ll play every hand.’ That kind of thing.
The truth is that we can identify streaks of luck only in retrospect. If luck favours us through a session, we can look back on it as ‘running good’, but to assume that we are in the middle of a streak and will continue being lucky is fallacious. The deck does not have a memory, and nothing is pre-ordained. Every hand is new.
Cognitive psychologists call this the Hot Hand Fallacy. It is ingrained in us because we have evolved to be pattern-seeking creatures, and are daunted by randomness. If we suffer four bad beats in a row, we are naturally wary when we get our money in good again, although we shouldn’t be. If a perfectly weighted coin falls ‘heads’ five times in a row, there is no logical reason to believe that it will come up ‘heads’ the sixth time. Coins don’t have memories, and nothing is destined.
Interestingly, I also see players around me display the opposite tendency: the Gambler’s Fallacy or the Monte Carlo Fallacy. If we give in to this, then when a coin falls ‘heads’ five times in a row, we believe that the sixth flip must be ‘tails.’ Similarly, I see players who haven’t hit a flush draw the last eight times they had one believing that it ‘is due’, just around the corner. It isn’t, of course. Everything is random.
Logically, Emperor should have rebought and continued playing. He had run bad, but that didn’t mean he would continue doing so. (Hot Hand Fallacy.) A regression to the mean was inevitable – though not necessarily in the next hand. (Gambler’s Fallacy.) In the long run, though, if he continued playing, Emperor would surely win – but losing so much money does cause emotional turbulence, and perhaps Emperor was right to quit before he got tempted to play blind.
These fallacies apply not just to gambling but to life. We lose hope too soon sometimes when we run bad. Equally, we often become arrogant, ascribing to skill or destiny what was merely good fortune. Life is, by default, a gamble we were forced into, and we owe it to ourselves to not be affected by past events, and to always do the right thing.
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Here’s a piece I wrote four years ago on the same subject: Throw a Lucky Man into the Sea.
For more, do check out the Range Rover archives.