Thinking Fast And Slow

You’re not as rational, unbiased, or unemotional as you think you are.

Who says so?

Dr. Daniel Kahneman, and he received a Nobel Prize in Economics for his research with Amos Twersky. Since no other Ph.D. psychologist received the top award for economics, you should take him very seriously.

He reports his own and other psychologists’ research in Thinking Fast And Slow. That research proves that the classical economists’ most basic premise is just plain wrong.
For centuries economists have insisted that we are rational decision-makers who unemotionally and objectively evaluate all our alternatives and select the one that maximizes our utility. A similar premise dominates the poker literature. Nearly all authors essentially and perhaps unconsciously assume that, if people just learned how they should play, they would automatically play well.

Since most players in casinos lose, their basic premise is obviously wrong, but they haven’t changed it. Pick up any poker book, and you will see little or no discussion of why people don’t apply the principles of winning poker.

Kahneman’s book answers a critically important question: Why don’t people act rationally? He encourages readers to “question the dogmatic assumption… that the human mind is rational and logical.” (p. 9)

This book will convince any open-minded reader that nobody – not even the poker immortals – is as unbiased or unemotional as the classical economists and poker authors claim.

The only way you can improve your results is to improve your decisions, and Kahneman, Tversky, and other psychologists’ “goal was to develop a psychological theory about how people make decisions about simple gambles… we observed systematic biases… intuitive preferences that consistently violated the rules of rational choice… we now understand the marvels as well as the flaws of intuitive thought.” (p. 10)

This book can show you how your systematic biases cause costly mistakes at the tables and other places. How can I be so sure? Because everybody has systematic biases, and these biases cause countless mistakes. Yours are probably different from mine, but we all have biases. If we understand them, we can reduce their destructive effects.

Some biases are affected by emotions. You may believe that your emotions have little or no effect on your poker decisions, but you’d be wrong. The research reported in this book proves that emotions have much greater effects than most people believe. We don’t control our emotions nearly as well as we think we do.

“Emotion now looms much larger in our understanding of intuitive judgments than it did in the past… judgments are [often] guided directly by liking or disliking with little deliberation or reasoning.” (p. 12)

In other words, you, I, and everyone else are likely to see and react to what we hope to see or are afraid of seeing, even when we’re wrong. Better players do it less often, but everybody does it.

Kahneman reports and analyzes examples of experts’ amazing intuition such as ”the chess master who walks past a street game and announces, ‘White mates in three,’ without stopping, or the physician who makes a complex diagnosis after a single glance at a patient.” (p. 11)

You’ve seen similar, almost magical, plays by great players. Somehow, they just “feel” that their opponent is on a bluff or has the nuts, and they make a great call or fold.

But there’s a huge problem with intuition. It’s extremely affected by biases, and most biases are unconscious. We think we’re being realistic, but are really reacting to our own biases. This problem is so serious that Kahneman wrote: “Much of this book is about the biases of intuition… We are often confident even when we are wrong.” (p. 4)

“When confronted with a problem— choosing a chess move or deciding whether to invest in a stock— the machinery of intuitive thought does the best it can. If the individual has relevant expertise, she will recognize the situation, and the intuitive solution that comes to her mind is likely to be correct. This is what happens when a chess master looks at a complex position: the few moves that immediately occur to him are all strong.” (p. 12)

That point has special significance for poker players because Doyle Brunson, a Hall of Fame player and the author of several influential books, wrote: “Stick to your first impression. Have the courage of your convictions.” That may be good advice for experts, but it’s terrible advice for most of us.

Most poker players – including you and me – are not experts, and we overestimate our skill and our intuition. We may believe that we know an opponent’s cards, motives, or strategy, but we respond at least partially to our biases and emotions, not to reality.

This tendency is particularly destructive in our complicated and mathematically-based game. Kahneman asked, “Why is it so difficult for us to think statistically? We easily think associatively, we think metaphorically, we think causally, but statistics requires thinking about many things at once, which is something that System 1 [our intuition] is not designed to do.” (p. 13)

As I wrote in previous columns, our intuitive brain acts quickly because it evolved in much simpler times, and we had to react quickly to threats. If we took the time to consider all the facts, we’d be dead.

Quick reactions don’t fit many poker decisions. Instead of reacting to a simple threat, we have to analyze many facts: the opponent’s skill and style, whether he plays the same when he is winning and losing, whether he is winning or losing at this moment, what he did before and after the flop, his stack’s size, and many other issues. And there may be others in the pot. Our intuitive brains can’t handle all that information.

“The difficulties of statistical thinking contribute to a puzzling limitation of our mind: our excessive confidence in what we believe we know, and our apparent inability to acknowledge the full extent of our ignorance… Overconfidence is fed by the illusory certainty of hindsight.” (p. 14)

In other words, we aren’t as smart as we think we are, and our overconfidence is increased by hindsight. After we get information, we believe we knew it all along.
If you doubt me, just remember the times you’ve seen someone call with a losing hand and then say, “I knew you had aces (or whatever hand beat him).” When you heard that, did you ever want to ask, “Then why did you call him?”

I urge you to study this book. Relate the research to your own thoughts and decisions. Constantly ask yourself, “How, when, and why am I irrational?” Then use your answers to make better decisions. My next few columns will discuss this book and relate it to your own thinking and play. ♠

After publishing five expensive poker books, Dr. Al, [email protected], now writes inexpensive eBooks. How to Beat Small Poker Games, Stay Young; Play Poker, How to Beat Killed Hold’em Games, and Competitive Edge Strategies For Poker And Business Winners cost only $2.99 at Amazon.com.