Tuesday, November 20, 2007

Chances Are

“In the beginning, everything was even money.”

Heard that one before? That’s Mike Caro’s self-described “most famous quote.” Caro appeared recently on Poker Psychology with Dr. Alan Schoonmaker over on Hold ’em Radio (the 10/24/07 episode). Schoonmaker started his podcast back in April of this year and consistently provides interesting guests and thoughtful interviews.

The episode featuring Caro was no exception. Great stuff throughout. (Incidentally, I only recently figured out how to subscribe to the feeds for Hold ’em Radio shows in my Juice player. I had been downloading them manually before. Here’s the page where you can find all of the feeds.)

Caro explains that quote along with several other concepts during the course of his appearance on Poker Psychology. Like a lot of you, I’m most familiar with him via Caro’s Book of Poker Tells. I’ve also spent some time now and then perusing some of the Mike Caro University of Poker, Gambling, and Life Strategy website from time to time. Can’t remember if I’d ever heard him interviewed before or not. Unsurprisingly (for those of us who have read him), Caro is a great speaker whose smooth, professorial delivery and sound way of thinking through his various ideas make us soon realize the “Mad Genius of Poker” is probably about the sanest person alive.

There are plenty of other places where one can find Caro expounding on his idea that we all start out this life with the notion that “everything is even money.” On the MCU site, he credits himself as having first uttered his “mantra” back in 1982. It’s the first of his “43 Exclusive Super/System 2 Tips from Mike Caro University” (in Super/System 2). You can also read a full explanation of the idea in this Gambling Times article from 2001.

In a nutshell, Caro is emphasizing that the most important skill one can develop in poker -- or in any other context -- is to learn how to estimate one’s chances for success or failure in any given situation. The quote particularly refers back to that moment when one lacks enough information to make such calculations, a time when -- according Caro -- all decisions appear to the untutored as coin flips. As he explains in Super/System 2, “If you don’t know how to estimate chances or you don’t have any information at all about a situation, then that event appears to be an even money situation.”

By way of further explanation, Caro describes scenarios illustrating the value of experiential learning. For example, on the Schoonmaker show, Caro talks about how one learns that when crossing a busy freeway, the chances are not 50-50 that one will avoid getting run over. Thankfully (for most of us), we don’t actually have to run out into the freeway to figure this out. We’re able by other means -- observation, an ability to think abstractly, study of analogous situations -- to calculate our odds of surviving such a freeway dash, and thus more than likely avoid making the attempt. We figure out, explains Caro, that “not everything is 50-50 . . . and your mission in life -- and your mission in poker -- is to defeat [or get beyond simply assuming] the concept that something is even money, unless it turns out, by coincidence, to be exactly even money.”

Been brooding over this idea for the last few days since I heard Caro bring it up again on Schoonmaker’s show. My instinctive response is to appreciate the lyrical, aphoristic quality of the saying. As I think about it further, though, I find myself wanting to qualify Caro’s observation in a couple of ways.

First of all, the point here isn’t really “in the beginning, everything was even money,” but rather that in the beginning, everything appears to be even money. Less pretty as a proverb, I know, but that is essentially the point.

Secondly, I wonder if this observation really holds in the same way for all of us. Do we all really begin this life with the notion that everything is a coin flip, having to determine, eventually, that our assumptions are in most cases inaccurate? I’m not going to try to ascend to the heights of the philosophers and posit any profundities about how children learn here. Instead let’s just take the more humble example of the novice limit Hold ’em player who in his very first hand ever played gets dealt A9-offsuit in the big blind. Does he think he’s even money to win the hand? When the flop comes seven-high, does he still think he’s even money? When an ace peels off on the turn, does he still think he’s even money?

Perhaps we might say the learning happens more quickly than we realize and just by sitting down and absorbing how others are responding to the board our novice player is rapidly moving away from the “even money” fallacy. Something tells me, though, that a lot of new players aren’t beginning with the idea that their odds are 50-50.

Rather -- and I’m speaking from my own experience and from observing others here -- I’d say more often than not the novice thinks his chances are much better than 50-50. In other words, in the beginning, everything (appears to be) better than even money, and it is only after a dozen or a hundred or a thousand times of realizing your flush is going to come on the river only a fifth of the time that you start to understand differently.

Then again, I could be wrong. Let your experience and learning determine whether or not I am.



Blogger OReally said...

Anyone who has spent time in the developing world has seen people run across busy highways, often carrying things and/or with children. Often even when there is a pedestrian overpass near by.

Those who do this must view their chances as better than even money.

11/20/2007 11:40 AM  
Blogger OhCaptain said...

This is a great post, but I'll probably be chewing on for days...thanks.

My experience is people tend to think that even money is a good bet, and thus take the chance on it. Not to mention, the general "Weeeeee!" factor that goes with a coin flip.

My experience, with at least the inner workings of my brain, suggests that at some point in time, I started seeing the coin flip as a losing proposition. Now, regardless of reality, start looking for the variance side the coin and assume that all possiibilities are losers.

Now, how to exploit all this at the table and better yet, how do we control our own warped understanding of the current situation?

11/20/2007 12:27 PM  
Blogger Rakewell said...

I think you're unquestionably correct, and the problem isn't really that people think everything is 50/50, but that they misestimate (either over or under) the odds.

Think of all the video clips you've seen of teenage boys dowsing each other with lighter fluid and setting their clothes on fire. Now, with a modicum of preparation, you can *usually* get away with that, have a little scary adrenaline rush, and be no worse the wear, other than some singed hairs.

The problem, though, is that whatever the actual probability is of the fire getting out of control, the kids always underestimate it. They perceive it as being zero, or close to zero.

To compound the problem, they underestimate, by orders of magnitude, the consequences of this being one of the unlucky times. They never, ever stop to consider how much pain 3rd-degree burns cause, or how they might like going through life with their face scarred beyond recognition and no fingers.

Same with the freeway. Except for really, really busy times and places, I probably could have much better than a 50% chance of making across unhurt. There have been a couple of occasions when I deemed it worth the risk (i.e., helping somebody lying hurt in the median). I would never undertake it if I thought it was 50/50; I have to guess it to be much closer to 99/1 to be worthwhile.

Anyway, yeah, you're right. I suspect that if Caro were more interested in being precise than in making a memorable point, he'd say that problems crop up not just when we erroneously estimate odds at 50/50, but *anytime* we operate either with a wrong guess as to the odds or with no clue whatsoever as to what they are. Information and experience are the cures to both facets of the problem.

11/23/2007 2:47 AM  
Blogger Jordan said...

I think the 'even money' at the beginning is more of "I will either win this hand or lose it," not necessarily thinking that 'my particular hand vs the villain this exact situation is a coin flip.'

11/25/2007 2:33 PM  
Blogger Unknown said...

I would suggest that there are two parts to this:
1) Estimating odds based on the information you have
2) Having good information by (lifelong) learning

When you know nothing, you have no information. Thus the correct estimate is 50/50. However, most people might not make that estimate, since they do not have the necessary skills. So, even though in the beginning, everything is even money, not many people would place their bets accordingly.

12/19/2012 4:49 PM  

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