Nobel economist Richard Thaler talks about how, as he was developing behavioral economics, he would ask high profile, classical economists to flip a coin for $500. He would offer them absolutely outrageous advantages. It was seriously something like my $750 to your $500. Had to be one flip though. They would turn him down because it was too much money to risk.

These were people who were 1) More or less geniuses. 2) Had like $200k jobs that were almost impossible to lose, as well as lucrative side gigs writing, consulting, etc. 3) Based their whole world view on the premise that people make rational economic decisions.

Yet they weren't smart enough to take a hugely +ev gamble that they could easily afford. Sure hope they didn't work on Wallstreet

In neuroscience the brain is described as 'plastic' until we die, which means that it's always changeable. This person is certainly capable of overcoming these issues, which 20 years ago may not have been enough to prevent them from being a winning online player anyway, assuming they have the right teacher and a mindset that's humble enough to realise what is getting in the way of their being able to win.

Where that's not true, it's a case of having to get them early enough such that they're not too stubborn to try to unlearn things they think are set in stone in their brain.

Lots of rational reasons to turn down a 50/50 flip. Obviously in the case where it's $750 to $500, and they on $200k+, those rational reasons don't add up to enough to turn it down, but it's a part of the +ev gambler's mindset that turning down eg is always irrational. It's not.

TLDR (way longer than I thought this post would be)

Variance is real and so is ROR so it's not always irrational to turn it down but for those people it was.

It's also rational to turn it down if you can't handle losing and you'll then steam and try to get it back in -ev games the times you lose. But those people could never win in poker long term.

I can make +ev bets,lose hundreds or even thousands of dollars and be perfectly happy. But if I lost 50 bucks playing roulette id be pissed at myself bc why the **** am I playing a -ev games. It's torching money. I'm sure part of it is learned over time but part of it is just the way my brain is wired. I just "got it" when it came to ev right away when I was 15 or whatever.

Most people obviously would be super pissed about losing hundreds or thousands of dollars on +ev bets (say hypothetically I had a bunch of match plays) and not really care about losing 50 on roulette.

Even if you could beat theory in someone's head- enough theory to say beat 2/5 nl for 25 an hour (so not a crusher by any stretch but a winner) most people can't handle having swings in the thousands of dollars to make 25 an hour.

And by the way most people don't even have the aptitude to learn a ton of theory in the first place.


Berkey and his sidekick Lamana are actually 2 great examples of people being wired totally differently. They've been friends since they were kids,got into poker together but have totally opposite mentalities when it comes to money and poker. Neither strikes me as a genius or as dumb and they probably have a similar intelligence level.

Berkey time and time again would go broke putting his entire bankroll on the table- something that makes me sick even thinking about. And frankly for every success story like Berkey probably 100 guys doing the same thing ended up broke and out of poker.

Lamana is a collosal nit. He's had access to the same info Berkey has for 20 years, can talk hands with him etc and yet he's so risk averse he really hasn't moved above 1/2 nl. It's really hard for people to fight the way they're naturally wired.

I know people with way less money than me that will play much bigger than me. They'll play some 50/100/200 plo game with 150k to their name and be willing to lose 100k in the game and start back lower if it happens. If I lost 100k in a game im gonna feel like my entire year was a waste. It might take me 6 months or a year to get that back playing my normal games.

Yet in game they'll tilt often and I'll almost never tilt. To me tilting is just stupid and not that I'm perfect but I'm pretty close to it as far as being able to stay on my A game or at least just leaving the rare time I feel tilt coming on.

To most people they'll feel the same if they lose say 6k or 10 k so once they hit that point where they don't care anymore it's open season and who is taking their money next. For me I'm able to separate myself from the situation and realize hey you can't control the cards,but you can control how you play. Losing 10k when you only had to lose 6k is moronic and avoiding that is the same as winning 4k. In 6 months you're not gonna remember what you won or lost today so why torch the money.

It's really really hard to fight your nature. Yes you can fine tune it some. So over the years I've gotten really good at not tilting. When I was younger I might tilt once or twice a year and I might leave 3-4 times a year bc I felt I was going to tilt. But I was already for whatever reason starting at a pretty high level as far as being to be able to play my A game consistently. Other people who tilt like crazy might be able to reign it in to some degree. So they go from playing their A game 80 percent of the time to 85 percent of the time and cut down on some of the money torching but that's probably their ceiling in that department.

A lot more than just knowing how to play poker hands goes into winning at poker long term. And so much of it just goes against human nature in most people.

I mean are we really going to act like the most studied theoretically sound player in each player pool is the biggest winner? Bc he really isnt unless he's also good at a lot of the soft skills that exist in slow paced live poke, not tilting,not playing tired etc.

I have to explain to my wife why I gave some random dude $500 or why I have an extra $750

Rational and +EV are not static.

It's changeable to a degree yes. But you could have started on me when I was 4 and you'd never be able to change my brain to make me a good artist.

Most people are so naturally risk averse that while you may make them less risk averse over time, most are never going to be comfortable enough with risk to be content with losing days having made the right decisions.

This actually reminds me of a friend of mine going to the casino and losing like 300 dollars playing blackjack a few days before I went to visit him. At the time they didn't make a lot of money.

His wife was still pissed at him.


He starts telling his story

"Why the hell would you bet 50 dollars on a hand of blackjack?"

He ended up getting 8,8 vs a 6 and had one of those split 2-3 times, double a couple type hands and got wiped out.

So as he's telling the story she's getting madder and madder.

Especially the part where he split split double double whatever.

She tells me to tell him he's an idiot and he shouldn't have done that.

"I say listen I get why you're mad. He shouldn't have gone to the casino. He shouldn't have bet 50 dollars a hand...."


"But he's gotta split those 8s he just has to."

This happened at least ten years ago and they have good money now but she'll still get pissed off if that story gets brought up.

Its irrational but it has nothing to do with being "smart" or not. People simply arent wired to think in terms of purely EV naturally. If you had never played poker and never thought about these things and someone asked you the same proposition, chances are high you would also decline the offer unless it was truly ridiculously lop-sided. People are just naturally risk averse, thats how our brains work.

Through poker we are lucky enough to have learnt how EV works and how it should be approached logically (if you can take the swings) and we can use these skills to make sound economical decisions in life. None of us had these skills naturally, we were taught them through poker related learning material.

A good example is insurance. Most people, also highly educated and successful people, all have insurance for stuff even though they could easily handle if something goes wrong. Something like travel insurance, or spending the extra insurance premium for expensive electronics. From an EV perspective these are just moronic -EV bets. You are kinda betting against the insurance company where they are betting that you will be fine, and you are betting that something will go wrong. Its a bet, and -EV (or the insurance company wouldnt offer it). These same people will often be the same you hear lecturing people over being stupid for "wasting the money on the lottery" even though thats pretty much the same thing, taking a -EV bet. Just on the one hand you are being risk averse, in the other you are doing the opposite, chasing a high. From an EV POV theres not much difference but naturally it feels fundamentally different.

That's just not true, neither from an artistic point of view, nor from a neuroscientific point of view. Where people appear to have natural aptitudes for certain things, unless there is some specific biological reason, we are all capable of learning languages, learning to be co-ordinated, learning to express ourselves artistically, learning logical rules, learning data, etc etc. We are hard wired to be a minimum level of competency at everything, and where we appear not to meet that minimum level of competency, we can explain that by looking at cultural and societal values around encouragement and the space we create for people to excel at certain things over others, and motivation.

That's not to say that you have the capacity to be a Ronaldo at football or a Picasso at art or a Marx at politics or a Beethoven or Einstein or whatever. The above is not incompatible with the idea that natural talent for a thing can exist that transcends training and environment. But you can still be 'good' at art, even now, if you were to have the motivation and a supportive environment. And this is true for far less subjective areas of interest than art as well.

Lol@ travel insurance and the like. I've had best buy ask me if I wanted to insure 40 dollar purchase wtf. Same thing when buying tickets to sorting events on stubhub. Something like 10 percent in case you get sick or hit by a car. I think I'll take my chances.

The funny thing is people are super results oriented with garbage like travel insurance. I had someone who travels 4 or 5 times a year end up getting sick and losing a few hundred dollars on his plane tickets. The hotels he was able to cancel. Some other friend went on and on about how he should have bought the travel insurance. Of course the guy never says a word the 99 percent of the time my friend doesn't get sick. And there are WAYYYYYY more people with this mentality than there are people who can learn to win at poker.

I do remember in 2005 or so paying 200ish dollars for 2 years of dell home support for my laptop that was probably 1200 dollars or so. If anything broke they'd come to my home and fix it. And back then a new screen alone was several hundred dollars. I knew I treat my laptops like ****,knew at minimum id break the screen at least one or twice in that time among other things and knew they were taking the absolute worst of it so I paid for it. They had to come fix it 5 or 6 times.

I couldn't possibly disagree more. In ten lifetimes I could never be good at art.

We don't appear to have natural aptitudes for things we flat out do.

When I could understand math on the first time im exposed to something that other kids in my class still didn't understand months and in some cases years later than isn't appearing to have a natural aptitude it's having one.

When my brother at 5 or 6 years old could take things apart ,put them back together,fix things etc with nobody teaching him how to do it or how any of this stuff works that's natural aptitude. When 30 something years later I still can't do the stuff he could at 5 or 6 despite him showing me time and time again how these things work ,how to fix them etc that's lack of aptitude and just the way my brain works.

The brain is extremely complex and all of our brains works very differently than one another.

People have the exact the same biases towards stuff like insurance that we as gamblers see all the time from statistics unaware people playing roulette and slots.

Sunk cost fallacy, gambler's fallacy, belief that because an insurance paid off once in the past its going to keep paying off, massive confirmation bias (like the guy in your story) etc etc.. Its almost impossible to get people who dont have experience gambling (the maths/statistics side) to understand. And even if they do seemingly agree and cant come up with counter-arguments, they still end up saying "but we should get insurance just in case".

My gf keeps saying that we should get home insurance (for stuff like furniture) even though we live in a pretty much fire proof apartment complex and its a complete waste of money. Ive tried to explain why theres no point and that its a losing proposition but it just doesnt click. Shes not stupid either, its just this way of thinking about finances simply comes extremely hard to most people.

Id be so tilted.
But yea it just doesn't click for a lot of people,even people good at math.

And God forbid you don't get the insurance and your couch somehow catches on fire or gets stolen (if that's covered lol) you'll NEVER hear the end of it.

Lol I know . If she really wants it she can buy it herself. She hasnt yet though, so I guess she sort of understands that it might not be a great purchase even though she keeps wanting me to reconsider

I had an ex gf want to buy travel insurance for a cruise we were taking. I tried explaining why it was redicilous to no avail. I even called the cruise company and asked if only she could buy the insurance and I could "gamble". But of course they said no. So we got the ****ing insurance.

I did however buy my plane ticket on the same flight separate from her so I could not buy the insurance.

When we got into our room on the cruise I had to use every ounce of discipline I had to fight the urge to say "good thing we got that travel insurance".

Ohh he was going to allow them to flip it once, big baller. There’s utility functions in place and there is variance. Perhaps every month he takes his wife out to dinner at a fancy restaurant where final tab is $500 and he’s wired a certain way that he may feel the need to possibly cancel that.

At any rate he’s making enough to not care about the $125 in theoretical money he’s passing up if losing makes him feel bad. The big baller can take his offer of $125 theoretical money and shove it as far as he’s concerned.

In essence these guys are playing with tournament chips and the theory of that is that the chips you win are worth less than those you lose

But it’s a somewhat weird extrapolation to go from this to “hard work doesn’t matter!”

Hard work doesn't matter isn't what was said.

Hard work matters but you can't turn most people into winning poker players is the argument.

Great so this guy didn't want to make $125 in ev bc half the time he'd lose 500 bucks. Like you said maybe he wants that 500 for a nice dinner with the wife. All well and good. Lots of people turn it down for this reason.


But I'm supposed to pretend if you beat theory into this guy's head the same guy would be willing and able to make 25 an hour in 2/5 nl while having thousands of dollars per hour in variance?


There could be lots of reasons the offer is turned down but at the end of the day the primary one comes down to risk aversion. He didn't want to miss out on that nice dinner half the time.

I'd bet anything the people who think about it for a few seconds and take the offer on average can be taught to be way better poker players than the ones who don't. It's that simple.

It doesn't make this guy stupid and it doesn't mean he can't do math. It's just the way he and most people are wired.

You can sarcastically say "big baller" 1000 more times if you want but that's a huge reason most people can never win at +ev gambling in general including poker even if taught how to play well.

Also I wonder if this Nobel Economist had a wife that would give you “$1,000 worth of grief” if you lost the flip.

Many reasons why these guys would fully understand but still choose not to do it.

Ok let’s take anyone who would take the flip, hard work matters and we could turn the majority of them into winning players if trained properly and the motivation was there. I thought the myth that poker players had “special powers” was dispelled back in 2005.

I think I only said it a few times, but “Big Baller!” Lol

I don't even think you could turn the majority of this group into winners but I think you could turn a much higher percentage of them into winners. This issue being this group is a very small percentage of the population.

People pay a premium to reduce financial risk even when the risk itself can't damage them. There's no way most people can deal with the swings that come with poker and continue to play well let alone not outright quit.

You're definitely twisting the argument completely. I Berkey and several others already said people could improve as players with hard work. But for most of them that just means losing less per hour.

Well, I think if the discussion is centered on if we can turn a poker player into a winner it should be focused on people who have an interest in playing poker and those usually aren’t the supremely risk averse.

Yeah someone who pays $30 in insurance for a $20 toaster probably wouldn’t become a world class nlhe heads up player but I’m not sure if we needed to watch a one hour podcast to learn that

Travel insurance is the one type of insurance you should probably get

Lol

I mean it depends on where you're travelling, but I know more than one person that would be dead without it.