Putting Bills Into a Machine

I’ve been asked variations of this question more than one hundred times over the years. Sometimes phrased as, “If I lose $100 (or some other number), should I give up for the day?”

My answer usually was some form of the following:

  1. Only play when you have the advantage. If the house has the edge, don’t play. It’s fairly easy to calculate in video poker whether you have the edge or not. In general, if you don’t know if you’re the favorite or not, you’re not.
  1. My answer assumes you have sufficient bankroll, actual and psychological, to ride it out. How to calculate how much bankroll you need is a discussion for another day.
  1. Are you still playing alertly?

If the first two conditions are met, and you can answer the third question in the affirmative, there’s no reason to stop playing just because you’re behind. Scores go up and down. The amount of bankroll you had at the beginning of the day is not a particularly significant number. Whether you are ahead or behind of this insignificant number is likewise insignificant. Your daily score is just one data point on your annual or lifetime score.

Regular Bob Dancer readers have seen variations of this numerous times. Why I bring it up today is because I recently read two different Annie Duke books — “Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts” (2018)  and “Quit: The Power of Knowing When to Walk Away” (2022). In each book, Annie takes a somewhat different view of stopping when losing than I’ve been preaching for years. 

She has another recent book — “How to Decide: Simple Tools for Making Better Choices.” (2020). Reading it is on my To Do list. Perhaps she addresses this there too.

The two books I’ve read present her ideas in different ways. It’s not that she changed her mind between the two books, it’s just that she’s presenting the same phenomenon in different contexts.

In “Thinking in Bets,” she’s speaking in the context of having a group of colleagues who hold each other accountable. If she has reached her loss limit while playing poker for the day and she didn’t quit, she’d have to explain her reasoning to her group. There can be good reasons for continuing, but she’ll have to defend them afterwards to a group of others. This extra step of having the default be quitting in certain circumstances and having to defend her actions if she didn’t follow that default, made it possible for her to step back and make a more rational decision.

In “Quit,” she’s speaking of rules made in advance about when to quit in certain circumstances, possibly when you don’t have a group to which you’re accountable. Her point is that it’s better to make these rules in advance than try to make them on a case-by-case basis in the heat of the moment. 

I have no stop loss rule in my discussion. Generally, I have believed them to be useless in video poker. So, have I changed my mind after reading Duke? 

Before I answer that, let me argue that poker and video poker are very different games. In video poker, it’s relatively easy to calculate whether or not you’re the favorite. Conditions to the game usually don’t change incrementally. (They can change drastically all at once — when 10x points ends at midnight, or you’re playing for a progressive which somebody hits — but usually they don’t change incrementally along the way. If it was a good game before you lost your $100, it’s still a good game.)

Poker is a much more difficult game than video poker. It’s not so much your skill that matters in poker, but rather your relative skill compared to the other players in the game. If the weak players leave and are replaced by strong players, you may or may not still be a favorite. 

It can be difficult to evaluate whether you’re a favorite in a poker game (and it changes over the course of a game), whereas it’s relatively easy to do this in video poker.   

So, while I believe Duke’s rules make a lot of sense in poker (and many other decision areas in life), I’m sticking with my own rules in video poker — which is a much simpler game.

Still, Duke mentioned one additional factor in this decision that I need to make more explicit in my rules. She says she noticed her level of play deteriorated after six or eight hours, no matter what the competition was, so she adjusted her stop limit to include that (when she could — obviously in tournaments there are times where you need to play longer sessions than that.)

In my rules, my third rule asked if I was still playing alertly — which assumes away some of the problem. My assumption is that I can determine at the time how alertly I am playing. In many ways this is like asking someone who has had two drinks if he is okay to safely drive. This driver may well not be a competent evaluator of the situation.

A rule of thumb of “no driving after two drinks unless it is at least two hours since the last drink” is a much safer rule than “I’ll figure it out at the time.” Similarly, for me anyway, a rule of “don’t play more than six hours straight” makes a lot of sense. After six hours, if I can rest two or more hours, then it’s fine to resume.

This would be a much better rule for me to follow than “I will decide at the time whether I am playing alertly.” I’m now 75 years of age. I would have made a different rule at age 50. And at age 85, if I’m still playing, my rule may well be three hours or less.

As Duke freely admits in her books, she wasn’t always perfect at following her guidelines. And I certainly haven’t robotically followed my own rules either. Still, having these rules and following them most of the time makes for better (and more profitable) decisions compared to not having such rules.


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