A Primer on Decision Theory

I watched Everything, Everywhere All at Once recently (the first half, it was a bit too gorey for my taste), but while watching it I had the feeling that that sort of multiverse type thinking is interesting and novel to people. Having played million(s?) of hands of poker, that kind of thinking comes naturally to me.

In life, you can control how structured your days are. If you choose to be in total control, your life can look like something out of the Truman show. If you let go completely you might end up being a backpacker traveling the world and never have the same day twice. These require two very different modes of operation to navigate.

If your life is ultra-structured then you see the same situations over and over. That conversation you have with the bodega employee, the order of things you do when you wake up in the morning and go to sleep. If your life is very chaotic, not in a bad sense but just in the sense of putting you in new situations all of the time, you have to be doing a thing that I first heard coined by Josh Waitzkin in his book “The Art of Learning”, interthematic connectedness. Basically just the idea that even though two situations are technically not the same, they share enough in common that you can apply what you’ve learned from one set of situations to another.

To take a simple example, if you’re backpacking around South America, you won’t enter the same bodega every day, so even though you won’t develop a rapport with a specific clerk, you will develop rapport with clerks in general, and if you don’t know the language very well, this transferred learning will show over time.

Thematic interconnected is the reason I spend time playing competitive computer games for example, Looks like a huge waste of time on paper, but the skills required to succeed consistently in the long run in any competitive environment transfer over to general problem solving skills in life. I’ve believed this for a long time and am more and more sure of it every year.

Anyways, the real purpose of this post is to share a bit about how poker changes the way one thinks when enough (quality) hands are played. And hopefully to give a sense for what this feels like to someone who has never played.

Poker is dynamic. The point of playing cards is to introduce true randomness into a game. So you basically never end up in the same exact situation twice. I won’t go into the combinatorics, but the more cards that are dealt, the less likely it is for you to have ever played this situation before.

Many things in life have this quality, and without it, poker wouldn’t be fun or popular. It challenges the mind, and just on a side note, I think the reason we find it fun and interesting is because we sense that we can thematically interconnect our learning from poker to other forms of hidden information or probability based reasoning.

The deeper, more interesting characteristic that poker has, nearly everyone misses. I would estimate 1% of the people who ever play poker actually dig deep enough under the surface to realize that in order to maximize your winnings you need to use multiverse thinking. It is very difficult to have any sort of meaningful results in poker if you do not do this.

In poker you always have to take stock of your own situation, as well as the situation you see in your environment, and those two factors together determine what you should do.

This would be like being in a bodega and deciding to 1) talk about the local sports team, 2) comment on the weather or 3) say nothing, based on what color your socks are today.

Obviously it would be ridiculous to live normal life this way, since the color of your socks have no bearing on what you might want to talk about, but in poker, if you don’t make your decisions this way then you are predictable, and if you are predictable, then someone will put you in the situation where you will do the predictable thing, and they will win and you will lose.

Poker is like going around in life living normally, but if someone predicts what you are going to say or do next, they are allowed to write it down and show you and you have to venmo them 20$ on the spot.

If that’s the world we lived in, everyone would be super well versed in Decision Theory. Since it’s not, I thought I’d write this blog post.

We have a saying in our group of friends/players, “I’m not trying to wait two weeks”. Basically this is a funny way to point to the fact that in poker, it will take you potentially two weeks to end up being in a situation again. If you have a bad hand and you’re “supposed” to fold, what seperates the good players from the bad players are the ones who can take stock, recognize it and be willing to wait two weeks until they have a better hand, even if they think they have a read on somebody.

I use a similar logic in a micro way in my life all the time. Lets say a situation comes up with someone that I’m living with, and we have ordered lunch and i’m hungry. They say something that bothers me. I take stock of the situation, am I tired, am I extra frustrated because I haven’t eaten all day, am I distracted? I will take these factors into account, like many other people, but I will even develop rules for myself for situations like this. I will never have a conversation about something important or sensitive when me and the person I’m with are hungry and are going to eat soon.

It’s hard to really express how deep this goes for me, and it’s not as neurotic as it sounds, I just think something about the structure of how I think has changed pretty significantly because of my career path. One last explanation I want to give that I think is interesting is that, in poker, you not only have to be unpredictable, but you have to know how often everybody is supposed to have every type of possible hand. You could almost describe it as needing to know the source code of the game, and this quality definitely transfers over to life, but is way more complicated and dynamic in the open world.

For example, this applies to my recent experience finding an apartment that I liked. Because, in seeing a place, you have a very limited amount of time in a location before making a consequential decision, you need to infer a lot of things from a limited amount of information. For me, it’s more of an intuitive thing, but I think my brain is just trying to figure out how many decisions the owner made that were similar to decisions that I would have made, or would have liked to be made for me. I also know the general competency of average people fairly well, and if the owner seems significantly more competent than the average, that’s a very good sign. It’s a bit like 1) Do I like the way that the place looks? if yes then see if I think the owner seems like a good landlord, if the owner doesn’t then no matter how much I like how the place looks I should wait two weeks until I find one with a good landlord.