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Thread: The Only Way to Win and the Unclimbable Mountain

  1. #1
    PART #1

    The Only Way to Win and the Unclimbable Mountain


    If I offered you 98 cents in exchange for a dollar you would likely refuse the wager, yet this is exactly the type of exchange that most casino patrons accept every day. There is no functional difference between handing the casino a dollar and getting back 95 cents and a dollar wager made on roulette, yet one is accepted and the other is rejected. Why is this? It's because one situation contains a random element and the other does not, making the two nearly identical situations seem very different in our minds. We humans simply aren't very good at quantifying randomness. Here are the three main issues that address this particular human failing.

    1.There are many cognitive biases which make the accurate in-head evaluation of random events impossible for anyone. It is not a mental deviation to which some rare gifted individuals are immune. It is a ubiquitous human trait we all share. People who follow the math appear to have limited immunity; they do not. What they have is a workaround (more on this later).

    2.If people apply different logic to identical situations they will often come to different conclusions, as happens in gambling situations. The only way to resolve something like this is to move back from your original conclusions and evaluate the decision making process itself. Where randomness is involved this is difficult because the human mind is not wired to identify, understand or comprehend randomness. Evolutionarily we have developed nothing but pattern recognition infrastructure. All learning and thought (patterns of neurons) is by definition pattern driven; what goes with this, what goes with that, what has to do with something else, etc... Our brains are pattern using, pattern driven, pattern creating, pattern recognition engines that without patterns would be lumps of fat.

    3.Therefore, by using different logic for identical situations we get different results. No one should accept less than a dollar for a dollar in a fair exchange, yet they do because their minds lead them astray.

    A Shortcut to Heuristics
    Let's talk for a moment about heuristics and cognitive biases. Cognitive biases are not insanities, nor are they unusual, aberrant, or in any way exceptional. They are simply a description of how all minds work. The human mind (the animal mind as well) cannot always (or ever) make decisions with perfect and complete information. Conventional thought therefore uses heuristics (short cuts) to reach decisions when perfect information is not available (sadly, that's most of the time). Total reliance on heuristics, which are inherently biased for decision making even when more complete information is available, can lead to cognitive distortion (very common). Only when an individual is completely unaware and unwilling to accept that they have made a snap decision based on imperfect information when better and more complete information is readily available does the field of psychology step in and say, “Hey, you might have a problem”. Taking a shortcut when another way is quicker and safer is imprudent.

    If you wished to buy a car in under a lifetime, you would not look at (and test drive) every car available. You would look in the paper, pick out a few that fit your criteria, and make your purchase, knowing full well that you were using a time saving shortcut (heuristic). Only if you insisted that buying a car after looking at only four of them was as accurate as looking at thousands of them and then buying (assuming doing so was equally easy) would your biased application of a common useful heuristic be upgraded to a mental problem. The two methods of car acquisition are not equal in time expenditure, so the see-four-and-buy method is probably preferable, even if it is obviously inferior in result. To think that your chances of getting the best deal looking at four cars or a thousand would be equal in result is insane. As long as you know you are taking a shortcut that is likely to have an inferior result, but is far superior in time usage, you are fine.

    The Road Not Taken
    Perhaps the most problematic bias that effects casino patrons' perceptions is the attentional bias. If left unchecked it will ride roughshod through what's left of our rational thought, leaving confirmation bias and the illusion of control in its wake. The classic textbook example of attentional bias is when one states emphatically that God answered their prayers, without considering all the times in their life they prayed and didn't get what they asked for, all the times they got something they wanted and hadn't prayed, and the even more common, not asking and not getting.

    There are four (+1: the base rate occurrence of whatever was asked for) avenues of information that are imperative to make a rational and accurate assessment of whether or not God was really the source of one's wish fulfillment. If we assign “P” for praying and “G” for getting what you asked for , and use plus and minus symbols to signify their presence or absence we get:

    1.+P +G = Praying and getting

    2.+P -G = Praying, but not getting
    3.-P +G = Not praying, but getting anyway
    4.-P -G = Not praying, and not getting (most common)

    In the biased (normal) mind only option #1 is given attention with options 2-4 being completely overlooked, or intentionally ignored. What we are left with is unfounded confirmation in the prayer's mind. The only way to confirm this scientifically would be to go back in time, do nothing different except for refraining from praying, and see if one then failed to get the what they had asked for in the other time-line. That's one way to say “It's not possible to be sure of anything.” The believer says, “I prayed, I got. End of story. Logic be damned.” 75% of the information needed to make an informed decision is not present and not available, yet people seem very happy to declare the puzzle completed with only 25% of the pieces present.

    Where this bias rears its ugly head in video poker is when people make a certain play and get a hand they wanted, and then attribute their hold to achieving the end result. The road not taken is neither considered nor available, and so we are left only with their destination, and their own biased belief that is was their choice of path that got them their. Whenever one reaches a fork in the road and turns left or right, the only way to be sure they have taken the best path is to take both and compare results. As this is impossible outside of laboratory triple blind studies we will never know what vistas the road not taken would have lead us to.

    Climbing Mount Everest Naked in the Snow
    How does all this apply to quantifying, understanding and correctly evaluating randomness? Hmm... Good question. In order to accurately assess in your head an event involving randomness like video poker, one would need to accurately remember all the hands they had ever been dealt, all the cards they had ever held, and all the results they had ever gotten...but wait that's not all. One would also have to remember each and every combination with equal weight. This means that regardless of whether or not they had been dealt a pat Royal Flush in hearts, or the 2s 4c 6h 8s Td, neither could stand out more in their minds than the other, because they have equal frequency. How much the hands pay is irrelevant to the calculation. Unfortunately, for the cause of clear thought, how much these equally probably hands pay is not so irrelevant to the human mind. You'll remember a dealt Royal in Hearts. Good freaking luck remembering when you got dealt a 2s4c6h8sTd off suit.

    Herein lies the problem: We lack the mental capability to identify or quantify randomness in our heads. We are always forced to use a heuristic in lieu of perfect information. Here, though, shortcuts cannot be used with even a modicum of accuracy. In some really interesting studies I read, researchers showed participants truly random number sequences and simulated random number sequences (sequences made by people) and discovered a 28% bias towards people thinking the truly random numbers were fake, and the fake ones were truly random. That means that left to their own devices 78% of the time the subjects could not spot true randomness at all, and instead favored the non-random number sequences over the real ones. The conclusion is clear: truly random events seem biased and non-random to our pattern seeking minds and vice versa. We can't see the forest for the trees, because we have no idea what a twree even looks like, or how to spell it.

    You were wondering where the subheading title came from? As it turns out, climbing Mount Everest naked in the snow and accurately quantifying random events in your head are about on par in impossibility. Their difficulty level diverges only in how it's perceived. People don't oft try to climb the highest mountain in the buff, but they try to make in-head judgments about random events all the time, sadly with equal chances of success.

  2. #2
    PART #2

    The Workaround
    How then do we summit the roof of the world in our full monty or quantify randomness in our heads??? Simple answer: We Don't! It is impossible! Stay warm and keep your clothes on. By the time we are done factoring in imperfect memory, selective memory, outcome bias, results bias, information bias, and all the other biased biases you might as well be putting a fanatic right wing conservative in charge of the pro choice moment. One cannot play video poker and make an accurate judgment about one's play or the randomness of a machine in one's head...can't be done.

    To make any kind of accurate assessment of truly random events, especially ones generated by a computer, the best tool at our disposal is another computer. It takes a thief to catch a thief, and only by fighting fire with fire do we have a chance for victory. Since computers use simple math to function, it is also possible to do the calculations by hand, albeit much slower. The key element to this workaround for our imperfect memories and biased recollections is that we don't use our heads to make the judgments. You do the calculations outside your head, and you don't allow pointless personal preference to poison your perceptions.

    The reason some folks seem to have limited immunity to human biases is not because they don't have them, it because they have adopted a workaround, and aren't trying to climb Mt. Everest in the snow sans kit. They have accepted that it is impossible and are instead lazily lounging on the beaches of Tahiti, with a margarita in one hand, and letting math do the heavy lifting.

    Try this simple mental exercise: Attempt to remember every single hand you have ever been dealt on a video poker machine over the course of your entire life with equal weight. Failed yet? Alright, now that we have established that this is impossible, put your faith in unbiased dispassionate probability math, if for no other reason because it is more likely to be telling you the truth than your own head which, we have proven beyond any shadow of a doubt, is unerringly biased to a fault. This is one job best outsourced (not to China) to pure provable mathematics.

    The only way to win, is not to play the game ~War Games

    ~FK

  3. #3
    Frank thank you for this post. Very interesting and informative. You present a lot of information as well as an interesting way to examine things when it comes to betting.

    One question, and it comes from your opening:

    "If I offered you 98 cents in exchange for a dollar you would likely refuse the wager, yet this is exactly the type of exchange that most casino patrons accept every day. There is no functional difference between handing the casino a dollar and getting back 95 cents and a dollar wager made on roulette, yet one is accepted and the other is rejected. Why is this?"

    I think most gamblers are willing to accept the casino edge on each bet for the opportunity to win more than they bet. For example, you bet $5 on a video poker game with a 2% edge for the casino for the chance of doubling your bet money, or tripling it or hitting a royal flush for oodles of money.

    How does this desire to win more than the initial bet figure into your thesis?

    Thanks.

  4. #4
    Originally Posted by Alan Mendelson View Post
    Frank thank you for this post. Very interesting and informative. You present a lot of information as well as an interesting way to examine things when it comes to betting.

    One question, and it comes from your opening:

    "If I offered you 98 cents in exchange for a dollar you would likely refuse the wager, yet this is exactly the type of exchange that most casino patrons accept every day. There is no functional difference between handing the casino a dollar and getting back 95 cents and a dollar wager made on roulette, yet one is accepted and the other is rejected. Why is this?"

    I think most gamblers are willing to accept the casino edge on each bet for the opportunity to win more than they bet. For example, you bet $5 on a video poker game with a 2% edge for the casino for the chance of doubling your bet money, or tripling it or hitting a royal flush for oodles of money.

    How does this desire to win more than the initial bet figure into your thesis?

    Thanks.
    It is the thesis. When you add a random element to a negative exchange the human mind loses the ability to accurately judge the deficit, and will accept the bum deal.

    As Rob or Arci will be only to happy to tell you, over time and with enough trials the net result ends up being the same, with or without the random element. If you're playing roulette, you are going to end up down about 5 cents for every dollar you bet...the short-term fluctuations are just window dressing on a rotten dilapidated shed.

  5. #5
    I understand your position Frank, but I am not questioning the house advantage. What I'm asking is don't you think most gamblers are aware of the house advantage and will still play thinking that they will win? In other words, are most gamblers denying the obvious-- and the math?? Thanks.

  6. #6
    Originally Posted by Alan Mendelson View Post
    I understand your position Frank, but I am not questioning the house advantage. What I'm asking is don't you think most gamblers are aware of the house advantage and will still play thinking that they will win? In other words, are most gamblers denying the obvious-- and the math?? Thanks.
    I would not say they are denying it. To deny something you first have to be aware of it. Basically the whole point of this essay is that no human mind can truly grasp randomness, so the only way to get around the issue is not to try.

    If I'm playing a game with 99.6% return I think of it as losing .4 cents on every dollar and ignore my results completely.

    Any attempt to think of it any other way or to acknowledge results would open the door to my human failings (of course I have them to) and lead to cognitive distortion. No one can accurately quantify random results in their head. I know this, so I don't even attempt it.

    You have to not think about it, to think about it correctly.

  7. #7
    Originally Posted by Alan Mendelson View Post
    I understand your position Frank, but I am not questioning the house advantage. What I'm asking is don't you think most gamblers are aware of the house advantage and will still play thinking that they will win? In other words, are most gamblers denying the obvious-- and the math?? Thanks.
    Yes, there are lots of casino players that have no idea what edge the casino has over them. In addition, many of them just love the comps and the status they perceive have a value high enough to offset any losses.

  8. #8
    Frank, I don't agree with your claim that the human mind cannot grasp the concept of randomness. It appears to me you are extrapolating on the idea that we can't remember every hand and that means we can't find a pattern to understand.

    You are right about the our minds being huge pattern matching machines. What you seem to omit is our ability to look at patterns of patterns. That is, a non-repeating assembly of the patterns we detect.

    Randomness has the attribute of no long term patterns, but literally hundreds of short term ones. A player can detect certain patterns that come and then disappear. Other patterns replace them and they disappear as well. As experience is gained this pattern of patterns coming and going IS detectable and can be understood as randomness as long as that coming and going is not in any way fixed.

    Now, I doubt very many people could tease this out on their own. However, once they are informed about how randomness works I think there are people who can see it in operation and "quantify randomness in their heads"..

  9. #9
    Originally Posted by arcimede$ View Post
    Frank, I don't agree with your claim that the human mind cannot grasp the concept of randomness. It appears to me you are extrapolating on the idea that we can't remember every hand and that means we can't find a pattern to understand.

    You are right about the our minds being huge pattern matching machines. What you seem to omit is our ability to look at patterns of patterns. That is, a non-repeating assembly of the patterns we detect.

    Randomness has the attribute of no long term patterns, but literally hundreds of short term ones. A player can detect certain patterns that come and then disappear. Other patterns replace them and they disappear as well. As experience is gained this pattern of patterns coming and going IS detectable and can be understood as randomness as long as that coming and going is not in any way fixed.

    Now, I doubt very many people could tease this out on their own. However, once they are informed about how randomness works I think there are people who can see it in operation and "quantify randomness in their heads"..
    Then perhaps I wasn't clear enough about what I was saying was IMPOSSIBLE. Every study ever done into human cognition, says there is no such thing as flawless unbiased recollection, and by extension no ability to correctly quantify and 100% accurately assess events containing a random element (for something like VP with millions of combinations).

    A Functional example would be someone able to play flawless video poker strategy without writing anything down, using a computer, or ever studying a strategy; with the the only thing guiding them being their own minds and their own play. This would include determining things like the fact that holding an inside straight in FPDW is better than a redraw, and that 9/5 Deuces returned more than NSUD.

    Just to get an accurate read on a FPDW redraw, would require storing statistical unbiased data in your head on a draw with 1,533,939 combinations. Really, you are saying someone has lived that can do this?

    As a different example: Someone that could 100% accurately detect a gaffed VP machine that dealt 1% less Aces than it was supposed to, but was random in all other ways.

    If you are saying there is someone out there in the great wide world that can do things like this 100% accurately, I'd really like to meet them.

    Now that I have explained what I meant by, "quantify randomness in their heads" are you sure you wouldn't like to retract your objection???

    My guess is I didn't explain what I meant well enough. I didn't liken the task to climbing the worlds highest mountain naked for nothing.

    What I'm talking about is not difficult or trainable, it's just flat out impossible.

    ~FK

    P.S. The example you gave might well be possible for a very select few with training. I was referring to far less trivial tasks.

  10. #10
    Frank, not sure what you are doing with all the examples. They don't apply to the question at hand as I understand it. We all recognize faces without understanding the exact position of every atom on the person's face. You stated "We lack the mental capability to identify or quantify randomness in our heads". I believe we have the ability to identify randomness to the same level of face recognition and many other pattern matching activities.

    I didn't mean to imply that our abilities extended to the level you are describing. Most people have difficulty choosing identical twins precisely. However, that doesn't diminish the ability to to recognize faces nor does it mean we lack the ability to identify or quantify a human face. It's not an all or nothing proposition.

    Here's an example for you. At one time I was unaware of Class II machines and the way they operated. I stopped in a Washington Indian casino and in less than 1/2 hour I was sure that the results were not random. It was only later I heard how the machines work.

    I think we are talking about degrees of precision and, as I said earlier, I'm not claiming anyone can remember every hand or discern very minute differences in operation. I'm simply saying we have the ability to identify randomness or something close to it.

  11. #11
    Originally Posted by arcimede$ View Post
    Frank, not sure what you are doing with all the examples. They don't apply to the question at hand as I understand it. We all recognize faces without understanding the exact position of every atom on the person's face. You stated "We lack the mental capability to identify or quantify randomness in our heads". I believe we have the ability to identify randomness to the same level of face recognition and many other pattern matching activities.

    I didn't mean to imply that our abilities extended to the level you are describing. Most people have difficulty choosing identical twins precisely. However, that doesn't diminish the ability to to recognize faces nor does it mean we lack the ability to identify or quantify a human face. It's not an all or nothing proposition.

    Here's an example for you. At one time I was unaware of Class II machines and the way they operated. I stopped in a Washington Indian casino and in less than 1/2 hour I was sure that the results were not random. It was only later I heard how the machines work.

    I think we are talking about degrees of precision and, as I said earlier, I'm not claiming anyone can remember every hand or discern very minute differences in operation. I'm simply saying we have the ability to identify randomness or something close to it.
    Kudos on spotting the Class II machines.

    If you were able to calculate their precise return in your head with no paper, calculator, or computer then you'd have gotten to the accuracy level I was shooting for in my post when I said what I said.

    Sorry if I wasn't clear.

    Please note that I have been told multiple times by multiple people that a particular machine type was non-random, only to check it myself and reject the null hypothesis with 99% assurance.

    Even if a person (not you for arguments sake) possess a natural randomness radar, it would still be imperfect and prone to the normal vagaries of flawed, biased human recollection...and therefore not something one would want to rely on if another better way was available. One is.

    My main point, which I hope you can at least agree with, is that so long as it is possible to do unbiased probability math outside one's head, there is no need to go with the obviously inferior and biased in-head heuristic alternative. Right???

    A = Trying to make judgments about things containing random variables in your head.
    B = Using probability math outside your head to make judgments about things containing random variables.

    B > A

    ~FK
    Last edited by Frank Kneeland; 09-27-2011 at 03:53 PM. Reason: adition

  12. #12
    Of course I agree that a precise method is superior.

  13. #13
    Frank, how does your information apply to video poker machines with a positive payback (greater than 100%)???

  14. #14
    Originally Posted by Alan Mendelson View Post
    Frank, how does your information apply to video poker machines with a positive payback (greater than 100%)???
    It applies to any machine or situation involving random variables. If you accept that you can't know anything for sure about it using your noggin, you consult the math and do the equations outside your head and then believe them. Your alternative is to attempt the impossible.

    What the math tells you might not be right, if you have errors or unaccounted for variables, but it does have a very good chance of being spot on.
    What your head tells you has no chance of being right for sure. Human recollection and perception is simply too flawed.

    ~FK

    P.S. Most People do not understand probability, let alone probability math. Suggested reading: What the Numbers Say: A Field Guide to Mastering Our Numerical World by Derrick Niederman & David Boyum

  15. #15
    Originally Posted by Frank Kneeland View Post
    It applies to any machine or situation involving random variables. If you accept that you can't know anything for sure about it using your noggin, you consult the math and do the equations outside your head and then believe them. Your alternative is to attempt the impossible.

    What the math tells you might not be right, if you have errors or unaccounted for variables, but it does have a very good chance of being spot on.
    What your head tells you has no chance of being right for sure. Human recollection and perception is simply too flawed.

    ~FK

    P.S. Most People do not understand probability, let alone probability math. Suggested reading: What the Numbers Say: A Field Guide to Mastering Our Numerical World by Derrick Niederman & David Boyum
    I'm sorry, Frank, could you put this in layman's terms? Is it okay to play these positive games or not? And under what conditions? I am going to guess that you will say it's okay to play them provided you have an understanding of the correct strategy, yes?

  16. #16
    Originally Posted by Alan Mendelson View Post
    I'm sorry, Frank, could you put this in layman's terms? Is it okay to play these positive games or not? And under what conditions? I am going to guess that you will say it's okay to play them provided you have an understanding of the correct strategy, yes?
    Well, the sorta point of this entire thread is there really isn't a layman's terms when it comes to something as complicated as Video Poker. If one applies simple logic to a situation like this, one's chance of being right is nearly nonexistent, because the situation isn't simple...(even if by accident one made the right choice, one would be guessing) One cannot grow a pomegranate from a mustard seed.

    Naturally, one could blindly follow what other people like myself tell them to do. I'm not found of this method of teaching VP. I am of the mind that one should only use other people's strategies as a time saving technique, if they are capable of making them themselves (manually)...and moreover, they should only use a computer program if they could do it on paper (by hand) without one.

    I have a "you must be at least this tall to ride this ride" policy when it comes to VP.

    I won't tell you what you should do, I will only explain the logic and math to you, and let you make your own decisions.

    If you really pin me to a wall and say, "Oh common Frank, this is a lot of tough thinking that you have already done, and I can't figure it out, just tell me?"

    Then my answer will always be, "Don't play...you have no edge!"
    Last edited by Frank Kneeland; 09-28-2011 at 10:28 AM.

  17. #17
    Originally Posted by Frank Kneeland View Post
    Well, the sorta point of this entire thread is there really isn't a layman's terms when it comes to something as complicated as Video Poker. If one applies simple logic to a situation like this, one's chance of being right is nearly nonexistent, because the situation isn't simple...(even if by accident one made the right choice, one would be guessing) One cannot grow a pomegranate from a mustard seed.

    Naturally, one could blindly follow what other people like myself tell them to do. I'm not found of this method of teaching VP. I am of the mind that one should only use other people's strategies as a time saving technique, if they are capable of making them themselves (manually)...and moreover, they should only use a computer program if they could do it on paper (by hand) without one.

    I have a "you must be at least this tall to ride this ride" policy when it comes to VP.

    I won't tell you what you should do, I will only explain the logic and math to you, and let you make your own decisions.

    If you really pin me to a wall and say, "Oh common Frank, this is a lot of tough thinking that you have already done, and I can't figure it out, just tell me?"

    Then my answer will always be, "Don't play...you have no edge!"
    No, Frank, what I am going to say to you is this: There are various books, publications, software, articles that say, for example, when dealt AAAKK in double double bonus you should drop the full house, the kings and hold only the three aces hoping for quads and perhaps quads with a kicker. Can't I follow that advice without running my own computer analysis when sitting at a video poker machine and this hand is dealt to me?

  18. #18
    I think some of this should be related to goals. If the goal is to make money then Frank's approach makes perfect sense. But, what if the goal is entertainment? For example, you wouldn't tell someone they have to study every aspect of the subject matter of a movie to go and enjoy one. In fact, if one did that they would likely find the movie less enjoyable.

  19. #19
    Originally Posted by arcimede$ View Post
    I think some of this should be related to goals. If the goal is to make money then Frank's approach makes perfect sense. But, what if the goal is entertainment? For example, you wouldn't tell someone they have to study every aspect of the subject matter of a movie to go and enjoy one. In fact, if one did that they would likely find the movie less enjoyable.
    I agree with Arci almost completely. (I would have omitted the word "almost", but I wouldn't want to set a precedent)

    Personally, because of who I am and what I stand for (A very Public Pro Gambler) I cannot advocate playing for fun in anyway.

    I teach only people that do not like to gamble, and simply need the pure income...and even then, only if they have no better options.

    I will therefore leave all the advice on recreational play to others. What the hell do I know about "fun" anyway.

  20. #20
    So is it safe to say your advice to people who want to be professionals is that they have to "know their stuff" or they won't make it as a pro, and that you have no comment about recreational gamblers except that you don't want them to become addicted?

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