= 27d567bc2d48d9f40e9ccc20ea370b15)
Nornagest comments on Verifying Rationality via RationalPoker.com - Less Wrong
You are viewing a comment permalink. View the original post to see all comments and the full post content.
= 783df68a0f980790206b9ea87794c5b6)
Loading…= b715d02e85f7b3b4ae65ca3d3e450868)
Subscribe to RSS Feed
Powered by Reddit
= f037147d6e6c911a85753b9abdedda8d)
You are viewing a comment permalink. View the original post to see all comments and the full post content.
Comments (154)
I'm frankly confused about the whole issue of poker (both online and real-life). I know a lot of smart people who claim to have made ridiculous amounts of money playing poker casually in their free time. Judging from what they're saying, it would seem like there are so many suckers around playing for real money that a highly intelligent person willing to study the game can exercise a ridiculous amount of arbitrage.
But if I accept all their stories at face value, then why on Earth do all these smart people toil at difficult jobs for mediocre salaries when they could be earning much more money gambling? In particular, why do even all these people I know who boast about their earnings at poker still maintain difficult and demanding day jobs? (Of course, they can reply that gambling is only a short-term opportunity while the career is more important in the long run, but they could still invest more time in gambling while scaling down their careers temporarily with a clear net profit. And even if that's not possible, with such vast profit opportunities, one would expect they'd be playing far more even in their presently available free time.)
I don't know what to think of all this. Whatever the truth might be, either I know a bunch of otherwise honest and down to Earth people who are lying or delusional about this issue, or there is actually a screaming opportunity for making money on easy arbitrage that few people bother to exploit, and even they only partly and incompletely. Both possibilities seem to me highly implausible (but the latter more so).
One of my housemates in college was able to maintain a fairly decent middle-class income playing poker, starting from a few books on professional play and a few months of experience (as well as a preexisting Magic: The Gathering habit, which may have provided some crossover skills). He was a fairly bright guy, but not a genius and not unusually rational outside the game, so it can be done; I've got a few theories as to why more people don't.
First, and probably most importantly, playing poker professionally is a job. It's often tedious, it's emotionally demanding, and since it relies on subverting the instincts that make gambling fun, it usually isn't. My friend spent ten or twelve hours a day playing, often on four tables at once, and while he was making about the same money that I now do in software, I never got the impression that he was working any less hard for it.
Second, it's not a reliable source of income over the short term. The variance in day-to-day take is astounding: some days my friend would stagger out of his room thousands of dollars the poorer, either because he'd gotten in a bad emotional state and lost rationality (the jargon is "on tilt") or just because of a run of bad luck. Indeed, professional poker players are expected to blow through their entire playing fund on a semi-regular basis. I imagine that a lot of people wouldn't want to live that way; financial stability is itself a net positive for most, as evidenced by the existence of insurance companies.
Finally, it's low-status. "Professional gambler" has a certain rough-edged glamour to it, but it occupies sort of the same mental space as "private investigator" or even "soldier of fortune": exciting but not respectable. Status considerations being as important as they are with regard to career choices, it wouldn't surprise me if this played an important role in limiting the number of people playing professionally.
Actually, the story of your housemate is precisely what the efficient markets hypothesis predicts: if you try hard to squeeze out some arbitrage profits from an efficient market, the profit you can expect will be roughly the same as what you could earn with other pursuits, including wage labor, given your talents and the amount of effort expended. So I'm not at all surprised to hear it; in fact, it would be surprising if the amount of arbitrage profits available were much less than that.
What does confuse me are the stories of people who claim that the arbitrage profits they can supposedly squeeze out are far above what they earn in their day jobs, as well as their unwillingness to spend more money and effort in gambling, which seems strikingly irrational if their stories are taken at face value.
Well, a decent middle-class income is far above what most college kids are making. At the time it was an absolutely astonishing amount of money to me. In a broader context it lines up well with the efficient markets hypothesis's conditions, of course, but I wouldn't be surprised if exactly the kind of astonishment I experienced back then, suitably inflated by word of mouth and barroom exaggeration, was responsible for the stories you've heard.