Theory From One of Sklansky\'s Books
 

I have read "Poker, Gaming & Life" by David Sklanksy (is it socially acceptable to admit this in this forum?) and most of it seems logically correct, and is interesting, but one bit I disagree with

Basically DS says that it is illogical for some one to take a 1 in 1000 chance of dying for $25,000. He reasons no one would accept $2.5 million and take certain death, and this has the same mathematical EV as the 1 in 1000 case, therefore it is illogical to take the 1 in 1000 chance of dying for any amount of money.

I would quote a few paragraphs, but I'm not sure about the legality and morality of that or whatever

anyway, before I get into this, I thought I'd let Sklansky confirm or deny this claim, maybe I have missinterpreted what he was trying to say or whatever, but it looks to me like a big mistake

Re: Theory From One of Sklansky\'s Books
 

I think a lot of people would take the millions .

Re: Theory From One of Sklansky\'s Books
 

Yeah, sorry DS, but this is a dumb argument.

The reason no one would take 2.5 M to die instantly is that they would die before they had a chance to enjoy their money. Lots of people would accept 2.5 M to die in 5 years. The better way to look at the situation would be to say that you don't get paid in the circumstance where you die, because you can't use the money. Then the math works out just fine.

Re: Theory From One of Sklansky\'s Books
 

There are various flaws in that EV calculation argument when the chance of dying is tiny and the rewards are huge.

Re: Theory From One of Sklansky\'s Books
 

Does David also prove that Bumble Bees can't fly.

Pretty clearly Ivory Tower Myopic Math that doesn't bother to look around and see that perfectly logical people take life threatening risks for the prospect of life improving gains all the time. In fact, a good deal of human progress has been the result of such risk takers. I suppose David will argue that they are all being illogical.

PairTheBoard

Re: Theory From One of Sklansky\'s Books
 

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There are various flaws in that EV calculation argument when the chance of dying is tiny and the rewards are huge.

[/ QUOTE ]

are you suggesting that that EV calculation argument is at all logical when the chance of dying is not tiny or the rewards are not huge?

edit: or if you could just sumarize what you meant in that article, if i have not done so

Re: Theory From One of Sklansky\'s Books
 

If you read the whole article you would realize that I don't say anything of the sort.

No one ever proved that bumblebees can't fly. Their ability to fly violates no law of physics.

The Black Scholes model is not a proof regarding math. You offered it up as an example of when an accepted mathematical proof turned out to be wrong.

You are unqualified to seriously talk about many of the subjects that you post about.

Re: Theory From One of Sklansky\'s Books
 

[ QUOTE ]
You are unqualified to seriously talk about many of the subjects that you post about.

[/ QUOTE ]

Thats an opinion, I don't like opinions, neither do you, right?

Mack

Re: Theory From One of Sklansky\'s Books
 

DS --
"If you read the whole article you would realize that I don't say anything of the sort."

I don't have access to the whole article. All I know is the OP's description and your reply to him which doesn't say much to contradict it or explain it for that matter.

DS --
"No one ever proved that bumblebees can't fly. Their ability to fly violates no law of physics."

Of course no one ever proved it. If they did the proof was obviously flawed. It's an old saying that ridicules those in Ivory Towers who conjure theories that have no basis in reality. Lousy Economists who promote unproven and untried investment strategies come to mind as an archetype.


DS --
"The Black Scholes model is not a proof regarding math. You offered it up as an example of when an accepted mathematical proof turned out to be wrong."

First of all, I did not offer Black-Scholes as "an example of when an accepted mathematical proof turned out to be wrong". How can you say I did? Are you lying, are you too dumb to understand what I said, are you being illogical, or is the wish just father to the thought for you? I said I had problems with it myself but that's entirely different from saying "it turned out to be wrong". I've since been getting some great lessons that explain it in a common sense way and which I suspect a lot of people are enjoying. jason1990 and mosta are a couple of very sharp guys.

I've never read the Black-Scholes paper, "The pricing of options and corporate liabilities", J. Polit. Econom., 81 (1973), 637-659 so I don't know what Mathematics was used in that paper. However there is plenty of mathematics that supports the Black-Scholes Formula and it is commonly taught in graduate level probablity classes.

jason1990 and mosta in this post:
mosta on Black-Scholes Math
have no problem recognizing the math I'm referring to. The math on the topic which I studied is from "Inroduction to Stochasitc Integration" by K.L. Chung and R.J. Williams, 2nd edition, pp255-262. R.J. Williams was my phd advisor at UCSD.

Unfortunately I have forgotten far more math by now than I remember.

DS --
"You are unqualified to seriously talk about many of the subjects that you post about. "

Oh Really? Well, pooh pooh pee doo.

PairTheBoard

Re: Theory From One of Sklansky\'s Books
 

DS --
"The Black Scholes model is not a proof regarding math. You offered it up as an example of when an accepted mathematical proof turned out to be wrong."

"First of all, I did not offer Black-Scholes as "an example of when an accepted mathematical proof turned out to be wrong". How can you say I did? Are you lying, are you too dumb to understand what I said, are you being illogical, or is the wish just father to the thought for you? I said I had problems with it myself but that's entirely different from saying "it turned out to be wrong". I've since been getting some great lessons that explain it in a common sense way and which I suspect a lot of people are enjoying. jason1990 and mosta are a couple of very sharp guys"

Pair The Board,

You have a problem. Perhaps it is simply that you read too fast. But this is about the fifth time something similar has happenned with you. I would be willing to say that my unclear writing is the problem except that others seem to understand it. In any case you completely misunderstood my point about your Black Scholes post.

I originally said that I knew of no generally accepted proof of a math theorum that later turned out to be wrong. You mentioned that the Black Scholes model might be. And now you think I am admonishing you because it isn't wrong. READ SLOWER. I have no idea whether it is right or wrong. My admonishment to you was that the example you brought up was in error, not because Black Scholes is not wrong, but BECAUSE IT IS NOT A MATH PROBLEM.

Re: Theory From One of Sklansky\'s Books
 

DS- Do you consider death to be infinitely -EV? I don't think you logically can. To illustrate, let us suppose that you were given the choice between living for 20 years with full use of your body or 20 years and 1 day without sight, hearing, or sensation, you would most assuredly (I should hope) select the former.

Prolonging life, therefore, is not of infinite value. The conditions in which that life is lived also weigh into account. Money in our society has a great impact upon the quality of a person's life. Consequently, risking duration of life for a medium by which the quality of life can be improved is not inherently illogical.

Whether or not that 1% chance at death for $10,000 makes sense is largely a question of pre-existing economic status. If you were to be offered that proposition, it would most certainly be -EV. $10,000 isn't terribly much to you, a few big bets perhaps.

If that same proposition were offered to a man starving to death on the streets of some third world hell-hole, he would take it in a flash, and logically so. The improvement in the quality of his life that would most likely be brought by that money outweighs the risk that the duration of his life might be cut short. If I were to be offered $1,000,000 in return for a 1% chance that I would die, I would likely accept the proposition.

Consider also that any action carries with it some small chance of death. When you cross the street, there's a small possibility that you won't make it to the other side. Evidently you conclude that the benefit of being able (or willing) to cross streets outweighs the potential risk of death, which proves that death isn't infinitely -EV.

Re: Theory From One of Sklansky\'s Books
 

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My admonishment to you was that the example you brought up was in error, not because Black Scholes is not wrong, but BECAUSE IT IS NOT A MATH PROBLEM.

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I don't know what "problem" you are referring to as "Black Scholes," but the questions of existence and uniqueness of hedging strategies in particular market models, as well as the determination of hedging strategies and option pricing, are definitely math problems. Mathematical finance is not really an experimental science; it's more of an axiomatic one. Once you lay down the axioms you're willing to accept, everything becomes a math problem. The fact that the EV of the stock does not enter into the price of the option is a mathematical theorem which must be proven.

Re: Theory From One of Sklansky\'s Books
 

[ QUOTE ]
The math on the topic which I studied is from "Inroduction to Stochasitc Integration" by K.L. Chung and R.J. Williams, 2nd edition, pp255-262. R.J. Williams was my phd advisor at UCSD.

[/ QUOTE ]
I just saw Ruth last month. I may in fact see her this weekend. I will have to mention you. Though she may not know who "PairTheBoard" is. [img]/images/graemlins/wink.gif[/img]

Re: Theory From One of Sklansky\'s Books
 

I think sklansky considers problems that exist on a purely abstract universe as math problems but not its applications to the real world. One characteristic of sklansky classified math problems(SCMP) is that they can be either true or false based on a set of axioms(so this includes logic).

Math is applied to the real world in the form of models. Models are neither right or wrong but are just description of behavior. They are accurate/inaccurate in various degrees. Except some models might be exact like a model that simply counts a quantity. Not sure how would classify that under (SCMP).

Re: Theory From One of Sklansky\'s Books
 

[ QUOTE ]
[ QUOTE ]
The math on the topic which I studied is from "Inroduction to Stochasitc Integration" by K.L. Chung and R.J. Williams, 2nd edition, pp255-262. R.J. Williams was my phd advisor at UCSD.

[/ QUOTE ]
I just saw Ruth last month. I may in fact see her this weekend. I will have to mention you. Though she may not know who "PairTheBoard" is. [img]/images/graemlins/wink.gif[/img]

[/ QUOTE ]

She will remember the student who moved from Las Vegas to San Diego to study probabilty - with an interest in the genetic algorithm and Fluid Limits. Tell her I'm doing fine and give her my best.

PairTheBoard
aka Lou
aka Louis

Re: Theory From One of Sklansky\'s Books
 

Isn't this similar to David's opinion about survival in the tournaments?
If one takes a big risk in a tournament and loses his chips, one is finished and eliminated from the race for bigger prizes. Since one is done when one's chips are gone, one needs to play conservatively and take less risks. Provided that one is an expert player who has an edge.

If you have the potential to earn 20 millions in your life, surely, taking 1 million for a 1% chance of dying is not correct?

Re: Theory From One of Sklansky\'s Books
 

[ QUOTE ]
I have read "Poker, Gaming & Life" by David Sklanksy (is it socially acceptable to admit this in this forum?) and most of it seems logically correct, and is interesting, but one bit I disagree with

Basically DS says that it is illogical for some one to take a 1 in 1000 chance of dying for $25,000. He reasons no one would accept $2.5 million and take certain death, and this has the same mathematical EV as the 1 in 1000 case, therefore it is illogical to take the 1 in 1000 chance of dying for any amount of money.

I would quote a few paragraphs, but I'm not sure about the legality and morality of that or whatever

anyway, before I get into this, I thought I'd let Sklansky confirm or deny this claim, maybe I have missinterpreted what he was trying to say or whatever, but it looks to me like a big mistake

[/ QUOTE ]

It's comments or posts like these that show me how disconnected some people can be to human emotion. By not factoring in human emotion you'll often come to the WRONG conclusion as David did here. Here is an example where taking this chance would be ENTIRELY logical:

A father see's that his son needs a transplant or he will die. He has no medical insurance and no way of paying for the procedure for his son which costs $25,000.

Some goofy scientist tells him that if he can retrieve a rare poisonous bird from the wild he'll give him $25,000. Let's say the odds of him dying in the process are 1000 to 1.

Would it be "illogical" for this father to try and save his son?

Love isn't logical David. I can take that a step further:

Your son is about to get hit by a truck. If you do nothing he will die 100% of the time. If you try to save him you will die 50% of the time and save him 25% of the time. Meaning that 25% of the time you'd both die.

Without love or human emotion the "logical" answer is simple. Save your own butt! Luckily, that's not how this world works.

Re: Theory From One of Sklansky\'s Books
 

First, I should say that I haven't read PG&L. But I don't understand how David can possibly conclude that, in general, there is no amount of money for which it is worth taking a 1 in 1000 shot of dying. So I doubt he actually did.

That being noted, Daniel, you said

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Love isn't logical David. I can take that a step further:

Your son is about to get hit by a truck. If you do nothing he will die 100% of the time. If you try to save him you will die 50% of the time and save him 25% of the time. Meaning that 25% of the time you'd both die.

Without love or human emotion the "logical" answer is simple. Save your own butt! Luckily, that's not how this world works.

[/ QUOTE ]

I'm not sure I see what you're doing here. I don't see any reason why the "logical" answer can't be to attempt to save your son. Are you assuming that the completely "logical" person would value his own health incredibly highly relative to that of his family? Why is that necessary?

What point is it you're trying to make here?

Re: Theory From One of Sklansky\'s Books
 

[ QUOTE ]

A father see's that his son needs a transplant or he will die. He has no medical insurance and no way of paying for the procedure for his son which costs $25,000.

Some goofy scientist tells him that if he can retrieve a rare poisonous bird from the wild he'll give him $25,000. Let's say the odds of him dying in the process are 1000 to 1.


[/ QUOTE ]

If the father takes the risk, this obviously only means that he believes taking that risk is better than not. To restate, HE believes that HE could not live with himself without having made that choice, therefore, he decides to save his son. He takes the risk because he believes the possibility of success weighs against the consequences. The small chance he survives and saves his son will be the reward, while on top of the chance that he doesn't succeed, he also feels he could not live with himself having not taken the risk.

If the father decides not to take the risk, this obviously means that he believes not taking the risk is the better choice. This is probably because he holds little value to his sons life and/or assumes he will feel no remorse.


[ QUOTE ]
Without love or human emotion the "logical" answer is simple. Save your own butt! Luckily, that's not how this world works.


[/ QUOTE ]

Thats exactly how this world works. Notice that whether or not the father chooses to save his son, he is always acting in his own best interest.

Re: Theory From One of Sklansky\'s Books
 

Daniel Negreanu --
"Some goofy scientist tells him that if he can retrieve a rare poisonous bird from the wild he'll give him $25,000. Let's say the odds of him dying in the process are 1000 to 1."

The thing is, there are plenty of guys taking risks like this all the time just for the money. They're not being illogical. They're just living.

Here's a good one:
DS --
"No one ever proved that bumblebees can't fly. Their ability to fly violates no law of physics."

Duh. Or could a more down to earth reason be that it's obvious to anyone who watches bumblebees fly that bumblebees Can fly.


PairTheBoard

Re: Theory From One of Sklansky\'s Books
 

[ QUOTE ]

[ QUOTE ]
Without love or human emotion the "logical" answer is simple. Save your own butt! Luckily, that's not how this world works.


[/ QUOTE ]

Thats exactly how this world works. Notice that whether or not the father chooses to save his son, he is always acting in his own best interest.

[/ QUOTE ]

one's own "best interest" or individual "desire" could be another's well being at the cost of one's own, or it caould be spite--one's own suffering for the purpose of causing another's suffering. it could be anything (NB: quite literally). by definition, whatever one happens to pursue in fact, must be their own "best interest". revealed preference theory.

I still find it surprizing that people derive any satisfaction from tautological arguments, and expound them so zealously. and how in the world do universities pay money for this stupid drivel?

Apologies Expected Especially From Daniel
 

It's comments or posts like these that show me how disconnected some people can be to human emotion. By not factoring in human emotion you'll often come to the WRONG conclusion as David did here. Here is an example where taking this chance would be ENTIRELY logical:

A father see's that his son needs a transplant or he will die. He has no medical insurance and no way of paying for the procedure for his son which costs $25,000.

"Some goofy scientist tells him that if he can retrieve a rare poisonous bird from the wild he'll give him $25,000. Let's say the odds of him dying in the process are 1000 to 1.

Would it be "illogical" for this father to try and save his son?

Love isn't logical David."



Here is what I wrote in Poker Gaming and Life:

".....If you are not willing to take $100,000 to be fired, you shouldn't take a one in 100 chance of being fired to gain $1000.........It should be obvious why this same type of analysis FALLS APART when you are risking your life,...."

Later on this:

"There are times however when it is logically correct to risk your life. I will mention three:

1. When you are trying to prevent something even worse than death, such as torture OR YOUR CHILD DYING.

2. When you are trying to prevent something almost as bad as death, such as slavery, and the risks of dying are small.

3. When not taking the risk results in an even greater risk of dying for you or (if you want to be altruistic) FOR OTHERS."

Re: Theory From One of Sklansky\'s Books
 

You make one major assumption or should I say assertion that the reason the father would want to save the son is because he couldn't live with himself if he didn't try.

What if the father is trying to save the son because he loves that child more than anything in this world and would do anything to protect it. That's human nature. At least amongst humans with compassion.

I know for a fact that my brother would die for me if he had to. Not because he is being selfish, but because he is a guardian by nature and his heart would lead him to do that.

My brother taking a bullet for me would be in MY best interest, not his.

Re: Apologies Expected Especially From Daniel
 

Hey good one David! Obviously all I read was the OP and that's clearly not accurate according to what you wrote. My apologies for assuming that he gave us all the correct information.

It doesn't however change my overall opinion that you'll often underestimate human emotion when related to poker. That's just in your nature being such an analytical person.

Your strengths lie in numbers rather than understanding human emotion and WHY people do what they do. In a nutshell, you being a math major versus a physchology major has a significant impact not only on how you play poker, but also how you approach thinking about it.

That's not really a knock on you at all. Not everyone excels at the same things. For example, I spend much less time worrying about the mathematical side of the game and much more time thinking about things like, "With John Doe being recently divorced, how is that going to change the way he plays the river?"

IMO, to be a great poker player it takes a steady diet of BOTH types of thinking. I think you'd agree with that broad generalization.

Re: Theory From One of Sklansky\'s Books
 

Hey Daniel, hope to see you posting on 2+2 more.

[ QUOTE ]
I know for a fact that my brother would die for me if he had to. Not because he is being selfish, but because he is a guardian by nature and his heart would lead him to do that.

My brother taking a bullet for me would be in MY best interest, not his.

[/ QUOTE ]

I think this is the miscommunication between you and DS. From your post it can be inferred that your brother values your life more than he values his own. Accordingly, he would dive in front of a bullet for you.

It would be incredibly unselfish of him to sacrafice his life for yours, but at the same time according to his value scheme, it is the most +EV move. The same reasoning applies to your father/son scenario.

Re: Apologies Expected Especially From Daniel
 

DS, I apologize if I didn't give an accurate summary of what you said in the article, but I don't think you did either, can I just type out some paragraphs from it?

Re: Theory From One of Sklansky\'s Books
 

You are right that i am making an assumption, but this is not a major one. Whatever choice the father makes, he does so in his own best interest, no matter what reason you give.

Regarding my assumption, try think about a father who knows he would feel no remorse having given up an oppurtinity to save his son and holds little personal value to his son. According to your definition, none of these things should even factor in because his heart will lead him to save his son, no matter what. However, I highly contend that a father who doesn't value his son's life, and knows he will feel no remorse or consequences, would happily avoid the risk. Conversely, a father who personally values his son and/or fears the personal consequences of passing the chance to save his son, would probably take the risk. In both situations, the father does what is best for him. It is impossible for him to do otherwise.


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I know for a fact that my brother would die for me if he had to. Not because he is being selfish, but because he is a guardian by nature and his heart would lead him to do that.

[/ QUOTE ]

Now you are making the huge assumption that your brother would save you regardless of the circumstances. I believe the circumstances make a difference (see above).

Also, being selfish isn't a bad thing. Everybody is selfish in every decision they make. I don't hold a negative connotation to that word. If you know for fact that your brother would save you, that probably means you know for a fact that your brother values your life and/or wouldn't be able to deal with consequences of not taking his life for you. Guardians only guard things they want to protect. HE WANTS to protect you, therefore, you end up being saved. Given the circumstances, if he chooses to save your life, he is acting in his best interest which, luckily, is coincidingly your best interest. If he chose not to, only his best interest is satisfied and you'd recieve no indirect benefits.

Bumblebee myth
 

[ QUOTE ]
DS --
"No one ever proved that bumblebees can't fly. Their ability to fly violates no law of physics."

Of course no one ever proved it. If they did the proof was obviously flawed. It's an old saying that ridicules those in Ivory Towers who conjure theories that have no basis in reality.

[/ QUOTE ]

This is just an old urban myth. A more realistic description is that for a long time (it has been "solved" today) physics/engineering could not explain how bumblebees could fly and in fact gave very incorrect results also when modeling other insects.

From what I've read it was a clasical example of making incorrect initial assumptions and then coming to a completly wrong result. (Garbage in - Garbage out.)

One assumption was for instance that insect wings were essentially rigid when in flight which today is obviously false to anyone who looks at a slowmotion film taken with a high speed camera of a bumblebee or other flying insect in fligt.

/Bjorn

Re: Theory From One of Sklansky\'s Books
 

What one thinks is their best interest often isn't actually what would have benefited them most. For example, bad poker players make decisions they think will benefit them most, however, in reality, other choices would have been more beneficial. Again, every decision one makes is what one BELIEVES will benefit one the most.

Further, I think the people who know they only do things that they think are best for them will then be able to make decisions that are more correlated to what will benefit them the most in reality. Therefore, this knowledge is far from useless.

Re: Apologies Expected Especially From Daniel
 

Greetings - and congratulations on your continuing professional successes.

[ QUOTE ]
Negreanu to Sklansky : "Your strengths lie in numbers rather than understanding human emotion and WHY people do what they do."

[/ QUOTE ]

From the books penned by David or the caped duo, I have understood that their efforts reside in trying to quantify such factors as human emotion. They are not ignoring the "human factor"; they are trying to analyse it. Hence, their use of terms such as "usually", "almost always", etc (and not of specific figures) when analysing the table behavior of certain types of players.

This is admittedly not too math'matical, but it sure beats the hell outta every other piece of advice!

I mean, you are surely correct to think, as you wrote, "With John Doe being recently divorced, how is that going to change the way he plays the river?" But you need to translate that to quantifiable and robust strategy, if you want to give advice on strategy -- and not just tell a story.

Take care.