Speaker 1: Pushkin. Can anyone or anything be truly altruistic? Can incredible
Speaker 1: acts of kindness cause more harm than good? And what's
Speaker 1: the most effective way of doing good? I'm sure that
Speaker 1: the best selling author Michael Lewis will have some interesting
Speaker 1: thoughts because the world's most notorious effective altruist, Sam Banguin Freed,
Speaker 1: is the subject of Michael's book Going Infinite. I'm going
Speaker 1: to be talking to Michael about that relationship and his
Speaker 1: latest book, Who Is Government. But I want your help
Speaker 1: to explore the theme of altruism with Michael Lewis, so
Speaker 1: please send all of your kindness related questions from Michael
Speaker 1: Lewis to Tales at Pushkin dot FM. Hello and welcome
Speaker 1: to another episode of Caution Questions, where I team up
Speaker 1: with clever people to answer your clever questions. And this
Speaker 1: time I'm joined by Nate Silver and Maria Konnikova. They
Speaker 1: are the hosts of the Risky Business podcast and they
Speaker 1: are here to answer questions from both sets of listeners.
Speaker 1: Nate is a political analyst. He's the author of On
Speaker 1: the Edge, and Maria is the best selling author of
Speaker 1: the Biggest Bluff. How I Learned to Pay Attention? Master
Speaker 1: myself and win both fantastic books. Both Nate and Maria
Speaker 1: are also journalists, and they are both high stakes poker players.
Speaker 1: I'm a journalist too, and an undercover economist, and I'm
Speaker 1: not much of a poker player. But between us, we
Speaker 1: should have some good answers for all of the smart
Speaker 1: questions that you've been sending in. We will be tackling
Speaker 1: smartphones in schools, tariffs, and how to use game theory
Speaker 1: to win at sports. Nate, Maria, welcome to Cautionary Tales.
Speaker 1: Thank you, Tom, Thanks so much.
Speaker 2: Tim.
Speaker 1: Well, should it be cautionary business or risky Tales?
Speaker 3: Risky cash, risky caution?
Speaker 2: That's good, that's good.
Speaker 1: You've been podcasting for how long?
Speaker 2: About a year? About a year?
Speaker 3: Yeah, we're coming up on the World Series of Poker
Speaker 3: begins in every May, and so yeah, we launched it
Speaker 3: just about a year ago. When we're coming up in
Speaker 3: our second World Series season, excellent, When Nate and I.
Speaker 2: Are both at the final table of the main event,
Speaker 2: that'll be really great for our Risky Business podcast audience growth.
Speaker 1: Would you be podcasting from the World Series if you're
Speaker 1: on the final table?
Speaker 2: Not at the final table, since there are no phones allowed, but.
Speaker 1: We'll find a way.
Speaker 3: I mean, we do have these long days, right, we
Speaker 3: both have real jobs, and then maybe you'll do several
Speaker 3: hours of real work quote unquote, and then play poker
Speaker 3: for twelve hours and then it's fine your two am
Speaker 3: Mexican food hangout or something. But they are long days.
Speaker 3: We do not get vacation when we're in Vegas.
Speaker 2: Basically we do not.
Speaker 1: Right enough poker chat, let us get into the virtual postbag.
Speaker 1: After we listened to the theme music for Portionary Tales.
Speaker 1: I am here with Nate Silver and Maria Konikova, and
Speaker 1: here is a good question to start with from listener Alex.
Speaker 1: Alex asks, have any personal experiences or academic theories really
Speaker 1: shaped your decision making? Let me put this one to
Speaker 1: Nate first, and I'd love to hear what both if
Speaker 1: you think, I.
Speaker 3: Would say my experience with risk taking and decision making
Speaker 3: is very hands on for the most part. Right when
Speaker 3: I was a kid, we would play fantasy baseball and
Speaker 3: have little NFL betting pools and things like that. Obviously poker,
Speaker 3: there's instructural material, but you know, most people are ultimately
Speaker 3: kind of largely self taught, you know, in my book
Speaker 3: on the Edge, then game theory plays a really large role,
Speaker 3: and game theory plays a very large role in poker.
Speaker 3: There are not computer programs called solvers that literally have
Speaker 3: solved the Nash equilibrium for poker. If you've seen a
Speaker 3: beautiful mind. A lot of things in life is like
Speaker 3: what's the game theory equilibrium of, Like what traffic patterns
Speaker 3: look like in New York, or how often you should
Speaker 3: eat one type of cuisine versus another, or any type
Speaker 3: of competitive situation. When there are lots of optionality, I'd
Speaker 3: say game theory is kind of the most important variable there.
Speaker 1: And game theory, we should say, is really the use
Speaker 1: of mathematical equations to model strategic into actions. So a
Speaker 1: very simple example of game theory is the game of
Speaker 1: rock paper scissors. Now, if I play rock, you're going
Speaker 1: to play paper and beat me. If I play paper,
Speaker 1: you're going to play scissors and beat me. And so
Speaker 1: game theory says, oh, you have to randomize, you have
Speaker 1: to have a one third chance of playing each strategy.
Speaker 1: I mean, that's kind of obvious. Game theory can be
Speaker 1: used to model much more complex situations, including famously, because
Speaker 1: it inspired one of the creators of game theory poker.
Speaker 2: Yeah, I would second Nate on game theory. It was
Speaker 2: one of the pinnacles of my academic work. And I'd
Speaker 2: also say the psychological theories of Danny Conneman have been
Speaker 2: hugely influential in how I think about decision making. He
Speaker 2: was an absolutely brilliant man who really unearthed a lot
Speaker 2: of the ways that our brains misprocess. I don't think
Speaker 2: that's a word, but I'm going to make it one
Speaker 2: misprocess information and the biases and heuristics that we're up against.
Speaker 2: And it's incredibly powerful because even if you know that
Speaker 2: those biases and heuristics exist in theory, in practice, you
Speaker 2: still exhibit them. Right. You have the game theory kind
Speaker 2: of that mathematical side, and then the psychological side of
Speaker 2: Conoman and poker, in my mind is the life experience
Speaker 2: that has cemented these more than anything else in my
Speaker 2: brain and has made me internalize how this actually works
Speaker 2: in reality and how you can try to decide optimally
Speaker 2: and then take that from the poker table to real life,
Speaker 2: because poker's an environment where you can really sample thousands
Speaker 2: and thousands and thousands of decisions, sample correctly, and as
Speaker 2: you know, Tim that's incredibly important when it comes to
Speaker 2: learning and trying to get a sense of probabilities and
Speaker 2: in real life, not the poker table. We never sample correctly, right,
Speaker 2: So that's where a lot of these biases come from.
Speaker 2: So I think poker is a very powerful teaching tool
Speaker 2: to help cement these theories into practice.
Speaker 1: Okay, I've got a great question from Drew loyal listeners
Speaker 1: to caution me tales. Now, I'm a big fan of
Speaker 1: board games, and Drew wants to know Maria and Nate
Speaker 1: do you play board games. If you play board games,
Speaker 1: do you bring a poker lens to the table or
Speaker 1: is it a different vibe?
Speaker 2: So I hate board casese I do not play board games.
Speaker 2: My sister is a little over six years older than
Speaker 2: I am, and she always loved board games. They bored me. Haha.
Speaker 2: They're just not interesting. And you know when someone brings out,
Speaker 2: you know, sellers of Katan or anything like that, I'm like,
Speaker 2: oh God, no, no, no no, please Ticket to ride
Speaker 2: as a favorite in my family and I just want
Speaker 2: to die, you know. For me, if there's game night,
Speaker 2: please let it be poker. Otherwise, please don't make me
Speaker 2: play and let me read my book on the side
Speaker 2: and cheer you on while you play. Yeah.
Speaker 3: I mean, look, some of the games get quite advanced,
Speaker 3: and so it's like, where do you go from a
Speaker 3: game that takes ten hours to learn something that's kind
Speaker 3: of a broken, overly simple game, Right, But like, yeah,
Speaker 3: I like games because I'm very competitive. Right, if I'm playing,
Speaker 3: it's like, oh, people, we're like, don't have that background
Speaker 3: in games or poker. Then I'm just gonna be honest.
Speaker 3: I tend to I tend to figure out the strategy
Speaker 3: pretty quick.
Speaker 1: And when you.
Speaker 2: Crush them, you crush their souls and their dreams, and
Speaker 2: they wish they'd never asked you to play. Day to
Speaker 2: your point about the complexity, there's a New Yorker cartoon
Speaker 2: that I absolutely love and it's a group of people
Speaker 2: sitting around a table and one of them is reading
Speaker 2: a game instruction manual and the rest of them are
Speaker 2: all skeletons. He says, and so those are the rules?
Speaker 2: Shall we start playing?
Speaker 3: I love it.
Speaker 1: I had the privilege of interviewing Klaus Touber, the creator
Speaker 1: of Settlers of Katan, and he said something that really
Speaker 1: stuck with me, which I suspect will resonate with you
Speaker 1: poker players. He said, you can know somebody their whole
Speaker 1: lives and play a game with them and you will
Speaker 1: see something that you've never seen.
Speaker 2: That's wonderful. And I actually that's how I feel about poker,
Speaker 2: and your character comes out. And by the way, I
Speaker 2: do have a very strong interest in games for my
Speaker 2: next book when it comes to cheating, so I'm interested in, like,
Speaker 2: what kind of a person you know cheats up Monopoly
Speaker 2: at home game night, People who want to win Just
Speaker 2: totally like mind boggling to me that you would, that
Speaker 2: you would do that, but that there you have it.
Speaker 3: Yeah, My partner is also very competitive, but his main
Speaker 3: objective is making sure that I don't win, right. He
Speaker 3: will go out, You'll go out of his way to
Speaker 3: lose himself if it's a murder suicide mission basically, which
Speaker 3: changes the strategy quite a bit.
Speaker 1: I feel seen that's amazing.
Speaker 3: So here's one for you, Tim. This question is from
Speaker 3: Carrie K E R R I E. I know it's
Speaker 3: Irish or something, Carrie, but anyway, Hi Tim and team.
Speaker 3: I worry that a big problem with the productivity gap
Speaker 3: in the UK is a lack of high quality data
Speaker 3: and data driven decision making. I see a lot of
Speaker 3: investment in data that is overseen by technical experts in
Speaker 3: a given domain, but very little consultation of data scientists.
Speaker 3: Company and organizational boards also seem to lack the sort
Speaker 3: of expertise which is often rolled into a catch all
Speaker 3: it function. I work in the public sector, and so
Speaker 3: I have framed my question accordingly. Should we have a
Speaker 3: government department devoted to data or is it all a
Speaker 3: bit nineteen eighty four, Best wishes, Carrie Well.
Speaker 1: I love the question, and we do kind of have
Speaker 1: a government department devoted to data. It's called the Office
Speaker 1: for National Statistics, but it's focused on very old school
Speaker 1: statistics rather than modern data science, and old school statistics
Speaker 1: tends to focus on smaller data sets, very well behaved,
Speaker 1: well formatted data sets. For example, you might go out
Speaker 1: and do a survey rather than just say, hey, well,
Speaker 1: we're going to just draw administrative data, or we're going
Speaker 1: to look at data that's coming out of people's smartphones,
Speaker 1: which you know, there's a lot more information in there,
Speaker 1: but it's a lot messier, to be honest. What really
Speaker 1: concerns me at the moment is that data is systematically
Speaker 1: underrated by governments. I think they don't realize how powerful
Speaker 1: it can be, that they don't realize how dangerous it
Speaker 1: can be, and it tends to be given a low
Speaker 1: political priority or misused. So at the moment in the US,
Speaker 1: for example, we've got this sort of sudden disappearance of
Speaker 1: all these government websites. It's unclear how much data has
Speaker 1: permanently disappeared, or is it just that it's temporarily gone down.
Speaker 1: Is somebody archiving it? Will the archives work or not?
Speaker 1: Archives don't always work. Are we going to have interrupted
Speaker 1: data sets? And it's very unclear what's gone and what hasn't.
Speaker 1: So that's a particularly extreme example, but generally, I'm working
Speaker 1: on a history of data. At the moment. It's so powerful,
Speaker 1: it's so important. It is the foundation of our health systems.
Speaker 1: It's the foundation of many of our economic activities, it's
Speaker 1: the foundation of science. It's also the foundation of some
Speaker 1: terrible abuses of human rights in the past. And yet
Speaker 1: it's kind of boring and it's kind of geeky, and
Speaker 1: so it just gets overlooked, and that's what really worries me.
Speaker 3: Yeah, I mean, it's interesting that you have, you know,
Speaker 3: one partisan faction in the US that seems to think
Speaker 3: that less data is better instead of having better data. Right,
Speaker 3: Some types of data you can go back and recollect,
Speaker 3: but some things you can't.
Speaker 2: Right.
Speaker 3: The UK, for example, has a data set of economic
Speaker 3: statistics like GDP that goes back like almost a thousand
Speaker 3: years or something, right, because they were collecting records for
Speaker 3: tax purposes and estate purposes and everything in real time.
Speaker 1: Yeah, well, we call the Doom Doomsday Book ten eighty six.
Speaker 1: I'm old enough to remember the nine hundredth anniversary of
Speaker 1: the Doomsday Book. There's an interesting little caution retail there.
Speaker 1: So for the nine hundredth anniversary of the Doomsday Book,
Speaker 1: which was in nineteen eighty six, the BBC organized this
Speaker 1: kind of a proto Wikipedia. They said, we're going to
Speaker 1: encourage this project where school kids across the country are
Speaker 1: going to act ass citizen journalists. They're going to go around,
Speaker 1: they'll interview people, they'll gather data, they'll write little essays.
Speaker 1: We've got maps, we'll have photographs, and we'll put it
Speaker 1: all on a laser disc. Remember laser disk. Well, you
Speaker 1: can see the problem, right, And we've got these highly
Speaker 1: sophisticated and expensive computer systems they're going to be accessible
Speaker 1: in every school. And it was called Doomsday nineteen eighty six.
Speaker 1: I think it was super cool. I remember it really well.
Speaker 1: And then by about nineteen ninety eight, it was just
Speaker 1: impossible to even read the laser disks. So this whole
Speaker 1: project just went offline. Meanwhile, by the way, the original
Speaker 1: Doomsday books from ten eighty six still available.
Speaker 2: Paper has a certain appeal and has lasted for centuries
Speaker 2: for a reason. You know, the flip side tim of
Speaker 2: what you were saying about what's happening in the US
Speaker 2: and kind to address the nineteen eighty four element of
Speaker 2: the question is so you know, yes, a lot of
Speaker 2: data is disappearing, and then data that was never meant
Speaker 2: to be aggregated and linked and personalized is being shared,
Speaker 2: and profiles of people of US citizens and non citizens
Speaker 2: are being created that should have never been created. Right.
Speaker 2: There were rules in place to keep those data sets
Speaker 2: separate for a reason, for private sup protections, and now
Speaker 2: the government is trying to roll back those rules and
Speaker 2: collect and de anonymize the data that was shared by
Speaker 2: people with the assumption that that would never happen. That's
Speaker 2: really bad, right, So there's this kind of dystopian thing
Speaker 2: going on.
Speaker 1: And there's there's history here. I mean, yeah, this has
Speaker 1: happened before. This happened in the nineteen forties.
Speaker 2: It's not good. Nineteen forties was not a good time
Speaker 2: in history if people remember.
Speaker 1: No, I think we can all agree on that one.
Speaker 1: Thank you very much, Nate and Maria. We will be
Speaker 1: answering more of your questions after this shortbreak. We are back.
Speaker 1: I'm here with Nate Silver and Maria Konikova of Risky Business,
Speaker 1: and we have an interesting question from a Risky Business
Speaker 1: listener who asks, one thing that happened during the tariffs
Speaker 1: which didn't get much attention, is the ten years treasury
Speaker 1: rate spiked from four to four and a half percent.
Speaker 1: I should say, by the way I work for the
Speaker 1: Financial Times, we were paying a lot of attention to that,
Speaker 1: but understand that outside geek land it was ignored. That
Speaker 1: basically means, the listener continues, there is less belief that
Speaker 1: US debt is a safe bet. It probably means somebody
Speaker 1: cough China, cough issued a cell order for a large
Speaker 1: amount of US treasury with the intent to move the
Speaker 1: interest rate as retaliation for tariffs. To cut to the Chase.
Speaker 1: The listener asks, I would be extremely interested in hearing
Speaker 1: what are your thoughts on the likelihood of the United
Speaker 1: States defaulting?
Speaker 2: Nay, this one's yere.
Speaker 3: I used to know more about credit default swaps and
Speaker 3: things like this. I mean, look, in the US runs
Speaker 3: up very large deficits. Neither party has any interest in
Speaker 3: doing what it would take to cut those deficits potentially. Right,
Speaker 3: we got lucky in kind of the financial crisis in
Speaker 3: COVID era of lowering rest rates where you can borrow
Speaker 3: very cheaply. It's no longer true now, in fact, borrowing
Speaker 3: he's getting more expensive. And so you know, I trust
Speaker 3: the market's fairly efficient here. But I guess the US
Speaker 3: is still a bit too big to fail.
Speaker 1: Well, normally, when we say too big to fail, we're
Speaker 1: referring to things that the US is going to bail
Speaker 1: out if necessary. Right, Yeah, so US is too big
Speaker 1: to save, that's your problem.
Speaker 3: You know, the world has profoundly been affected by Trump's
Speaker 3: second term in a way it wasn't in Trump's first term.
Speaker 3: Our neighbors to the north, Canada, had an election that
Speaker 3: was entirely upended. The Liberals want to back in power,
Speaker 3: even though Trudeau had been very unpopular. Right, I would
Speaker 3: argue that the election of the new pope was in
Speaker 3: part a response to Trump and the changing geopolitical world, right,
Speaker 3: and say, Okay, we want to have some influence on
Speaker 3: the United States. Have figure who's not Trump? It can
Speaker 3: balance them out somehow, And so yeah, we're way a
Speaker 3: different world. And I suppose I trust markets and investors
Speaker 3: are intelligent about that. And I'm not sure it's it's
Speaker 3: China so much as the fact we're in a new regime.
Speaker 1: Yeah, I certainly agree. I don't think China needed to
Speaker 1: do anything to make the US Treasury rate spike. When
Speaker 1: the rate spikes, by the way, it means people are
Speaker 1: selling US government debt. When they sell it, the price
Speaker 1: goes down, the interest rates goes up. But yeah, plenty
Speaker 1: of people willing to do that without any coordinated action
Speaker 1: from China. I mean, there is absolutely zero need for
Speaker 1: the US government to default, because the US government can
Speaker 1: always print more dollars. I mean, it could be the
Speaker 1: US government debt gets less attractive, it could be that
Speaker 1: inflation takes off, it could be there all kinds of problems,
Speaker 1: but there's never a need to default. I think the
Speaker 1: decision to default would be just that, it would be
Speaker 1: a decision the US government would have to actively decide
Speaker 1: we want to stiff our creditors. So you just have
Speaker 1: to look at the presidents and say, does this look
Speaker 1: like a man who stiffs his creditors? I don't think.
Speaker 1: I don't think. So how long does it sounds like
Speaker 1: Donald J? Trump?
Speaker 2: To me?
Speaker 3: This is President Trump, which I can go out to
Speaker 3: him and the ft.
Speaker 1: We have a new acronym. It's Taco. Taco stands for
Speaker 1: Trump always chicken out. So the bet is that he
Speaker 1: will not in fact default, even though he's talking about
Speaker 1: various things that already look like default, because the consequences
Speaker 1: would be so catastrophic that he would look at the
Speaker 1: consequences and he would back away. That doesn't mean that
Speaker 1: he couldn't do some damage. So fingers crossed, all right?
Speaker 2: So listener Jack wants us to explore the thorny issue
Speaker 2: of cell phones in school and writes Australia has been
Speaker 2: running an experiment with New South Wales banning mobile phone
Speaker 2: use in all schools from October twenty twenty three. This
Speaker 2: is following the implementation of a ban in Victoria in
Speaker 2: twenty twenty, which itself cites research from England and other justifications.
Speaker 2: So this listener has kids in school. This is not
Speaker 2: where I thought the question was going to go. Actively
Speaker 2: helps the fourteen year old subvert this ban, so they
Speaker 2: have an old phone in a locked pouch and their
Speaker 2: actual phone in their bag. This is because they must
Speaker 2: use their phone to hotspot the internet to their laptop.
Speaker 2: Jack writes, My opinion is the whole thing as stupid,
Speaker 2: as most kids have some kind of workaround and are
Speaker 2: on their laptops all day. Anyway, if parents are on
Speaker 2: their phones all the time, why are we expecting kids
Speaker 2: not to be. I still see teachers in playgrounds face
Speaker 2: and phone, and all the injustices and hypocrisy of my
Speaker 2: own school days come flooding back. I mean, I know
Speaker 2: I'm asking this question. I have so many thoughts, but
Speaker 2: I'll open it up to you guys first.
Speaker 1: I also have thoughts. I think the hypocrisy thought is real.
Speaker 1: I have three children myself. My oldest child is twenty one,
Speaker 1: the youngest is thirteen. They see me being distracted by
Speaker 1: my phone all the time, and of course they're going
Speaker 1: to be influenced by that. I think that this is
Speaker 1: an evil device, useful but evil that we all of
Speaker 1: us need to fight together because it's capable of ruining
Speaker 1: all of our lives. I feel like I should set
Speaker 1: a good example, and I don't feel that the fact
Speaker 1: that the grown ups are being distracted by the phones
Speaker 1: is particularly a good reason to say the kids should
Speaker 1: have the phones too. I mean, we would never say, hey,
Speaker 1: I see the grown ups drinking vodka and smoking, so
Speaker 1: why surely it's fine for the nine year olds to
Speaker 1: also drink vodka and smoke. I mean, I don't think
Speaker 1: that follows, but.
Speaker 2: It's hypocritical term. It's hypocritical that you do not like
Speaker 2: your child.
Speaker 1: Yeah, it will. I think it suggests that maybe the
Speaker 1: grown up shouldn't bring so much vodka and shouldn't smoke
Speaker 1: so much, rather than the other way around. But anyway, yeah,
Speaker 1: we are setting an example, whether we like it or not.
Speaker 2: I completely agree with that. And to add to it,
Speaker 2: the use of screens in general, it's very different depending
Speaker 2: on your age. There's emerging research, but now we have
Speaker 2: a few decades worth of what phones do to developing
Speaker 2: brains and kind of the habits that you create from
Speaker 2: a young age. So being on the phone as an
Speaker 2: adult who grew up without that kind of access is
Speaker 2: very different from growing up and actually constantly being connected
Speaker 2: to a scream. By the way, there's also research that
Speaker 2: shows that taking notes by hand is much more powerful
Speaker 2: than taking notes on a laptop. You retain more information,
Speaker 2: you learn better because there's a brain link between the
Speaker 2: hand and the brain that does not exist when you're typing.
Speaker 2: It would be better. I totally agree with you, Tim,
Speaker 2: Adults should be on their phones much less than I
Speaker 2: write about this. I think it's actually really great practice
Speaker 2: to not have your phone. I've sometimes left my phone
Speaker 2: at home on purpose to kind of have a day
Speaker 2: without cell phones. I have programs that turn the Internet
Speaker 2: off on my computer because I lack willpower if I don't,
Speaker 2: forcibly kind of have it turned off to try to
Speaker 2: have some deep concentration, deep writing time. This is all
Speaker 2: kind of related to our executive function, our self control ability,
Speaker 2: our ability to learn, our memory. All of these things
Speaker 2: are interconnected. And don't you want your child to actually
Speaker 2: emerge as a kind of smart adult who's capable of
Speaker 2: all of these things as opposed to someone who is
Speaker 2: constantly distracted.
Speaker 1: Nate strikes me as the three screens that wants going
Speaker 1: nate anythought.
Speaker 3: You know, I just have my laptops. People think I
Speaker 3: have some big, elaborate, minor setup. I just have my
Speaker 3: little laptop. Actually, yeah, Look, is it paternalistic to tell
Speaker 3: kids they can't use their phones? I mean, yeah, but
Speaker 3: they're kids, right, so you're allowed, You're allowed to be
Speaker 3: paternalistic toward them. And I don't know. I mean, I
Speaker 3: guess the one caveat I have is I was chronically
Speaker 3: pretty bored in school, right, and so I'm sympathetic to
Speaker 3: the kids that are like, Okay, I'm bored. I'm learning
Speaker 3: things I already know. But like, it is a situation
Speaker 3: where I think you have to have some type of
Speaker 3: consistent enforcement in the rules. But when you're in school,
Speaker 3: blame your teacher's not making you interested, But don't blame
Speaker 3: them for not letting you be on Instagram while you're
Speaker 3: supposed to be learning algebra.
Speaker 1: I think it might also be a collective action problem. Yes,
Speaker 1: I think it's perfectly possible that you've got tea majors
Speaker 1: who would be quite happy if nobody in the school
Speaker 1: had Instagram or nobody had Snapchat. But if other people
Speaker 1: are using Snapchat to communicate, to arrange to meet up. Well,
Speaker 1: then I need Snapchat too, and just talking to teenagers,
Speaker 1: I think that viewpoint is not unusual. Some of them
Speaker 1: are like, please, can you just ban everybody from using
Speaker 1: it and then I'll be happy? Yeah, Okay, let's move
Speaker 1: on because I I've got a question specifically from Maria
Speaker 1: from a long, long time listener from Quebec. They would
Speaker 1: like to hear Maria talk about a particular point of
Speaker 1: her book, The Biggest Bluff, where she describes the breakfast
Speaker 1: she had with her mentor you were trying to find
Speaker 1: somebody who would teach her to play poker so that
Speaker 1: you could write a book about learning to play poker.
Speaker 1: He only became interested when he realized you don't know
Speaker 1: anything at all about this subject. You don't even know
Speaker 1: how a deck of cards works. And our listener says,
Speaker 1: I am sixty five years old and I went through
Speaker 1: a couple of career changes and I find this story
Speaker 1: very moving and so true that what it means to
Speaker 1: learn something and to teach something. So what are your
Speaker 1: thoughts on that?
Speaker 2: Yeah? I think so. This conversation took place the first
Speaker 2: time I ever met Eric Seidell, who is a legend
Speaker 2: of the poker world, and he had never taken on
Speaker 2: a poker student before. And what stood out about me
Speaker 2: was that I was a complete blank slate. I didn't
Speaker 2: have any bad habits. I didn't have any habits, right,
Speaker 2: I didn't know anything. And so for him, I think
Speaker 2: it was a very interesting experiment, just like for me,
Speaker 2: it was an interesting experiment from scratch. You know, what
Speaker 2: can he do with me given my background in psychology
Speaker 2: in a short period of time these days, when you
Speaker 2: know I've got all these math wizards and selvers and
Speaker 2: all of these things, is kind of psychology hard work.
Speaker 2: And if my background isn't enough, right, could I do well?
Speaker 2: And so if I could, that would be an amazing,
Speaker 2: kintive proof of concept for the way that he thinks
Speaker 2: about the game. And so I think to him, that's
Speaker 2: what made this interesting and that's what made it appealing Nate.
Speaker 1: Why is Maria so good at poker? Is it the coach?
Speaker 1: Is it her training as a psychologist? Is it something else?
Speaker 3: I think it's her and not the coaching. Although Maria
Speaker 3: is a wonderfully well connected person who has access to
Speaker 3: some of the best poker minds in the world. But yeah, look,
Speaker 3: it's the balance of the people reading skills and the
Speaker 3: mathematical skills and the discipline. Really, you know, it's rare
Speaker 3: to see Maria tilt. I'm sure she does it right,
Speaker 3: but I think she is playing more than I am.
Speaker 1: Frankly, Tilting is basically where you get emotional and it
Speaker 1: affects your decisions.
Speaker 3: Tilt doesn't have to be anger, right. It can be like, oh,
Speaker 3: I've had a great day, so I'm gonna not fight
Speaker 3: for this plot that you're supposed to bluff everything. It
Speaker 3: can be a lot of different formats of it. But
Speaker 3: like you know, we no one always plays their A game, right.
Speaker 3: But if you're always playing your B plus game or better,
Speaker 3: and you're really smart in lots of different ways and
Speaker 3: read people well and maybe defy stereotypes a little bit too,
Speaker 3: maybe are more aggressive than people are expecting. So yeah,
Speaker 3: I would say she's a well rounded poker player. By
Speaker 3: the way, It's part of like learning the game later
Speaker 3: is that you might wind up being a little bit
Speaker 3: more well rounded. When I used to play for a
Speaker 3: living back god twenty years ago, now I'm getting old,
Speaker 3: I played a game called limit Hold them, which the
Speaker 3: same amount as bet on every hand or as a
Speaker 3: no limit you can be anywhere from one chip to
Speaker 3: the entire size of your stack, and it's a much
Speaker 3: different game. And so I had to spend a lot
Speaker 3: of time unlearning habits from limit hold them, which can
Speaker 3: be bad habits in no limit holding.
Speaker 1: We've got more questions coming up, but first let's take
Speaker 1: a quick break. Welcome back to caush me questions with me,
Speaker 1: Tim Harford.
Speaker 2: And me Maria Kannakova and me Nate Silver.
Speaker 3: So here's a question from Mark. Mark asks, it's no
Speaker 3: secret that political donations are tied to political favors, legislation
Speaker 3: benefiting the highest owners, and so forth. If the politicians
Speaker 3: are the machine, and the machine runs on money, what
Speaker 3: if we tweaked the source of the money. What would
Speaker 3: happen if, by some stroke of magic, Congress received vastly
Speaker 3: larger salaries, increasing with years of service. But with one
Speaker 3: big caveat, politicians cannot accept any donations, gifts, speaking fees,
Speaker 3: or favors in any form other than direct money donations
Speaker 3: from constituents up to the federal limits without forfeiting their
Speaker 3: public service salary. So put, simply, what if public service
Speaker 3: was the bigger, more valuable incentive. Could it even outcompete
Speaker 3: the current incentives? Would governing change for the better or
Speaker 3: for the worse? And why I like it?
Speaker 2: You know, it's a good question, but it's slightly naive
Speaker 2: in the sense that we already have rules against politicians
Speaker 2: accepting all sorts of things that Mark wants them not
Speaker 2: to accept. And there are ways around them, right There
Speaker 2: are packs, which are political action committees which you can
Speaker 2: donate to. There's ways that you can lobby and influence people.
Speaker 2: People would get around these incentives very easily, just like
Speaker 2: they do today.
Speaker 1: This maybe is a naive observation, but I would have
Speaker 1: thought there was a difference between donations to a campaign
Speaker 1: for the purposes of spending money on adverts to get
Speaker 1: reelected versus just donations to a politician's bank account. There
Speaker 1: should be a bright line between the two of them.
Speaker 1: I mean, Nate, you're the experts on this.
Speaker 3: The answers. You are supposed to report to the Federal
Speaker 3: Election Commission every dollar that you spend, so you definitely
Speaker 3: run a risk of expenses being scrutinized if they're not legitimate.
Speaker 3: But of course there are a million things a tranch
Speaker 3: of expenses that are ambiguous between personal and business expenses. Right,
Speaker 3: You can also shuffle money to consultants and pay them
Speaker 3: maybe more than their worth, in exchange for who knows
Speaker 3: favors later on and so forth. I think it's probably
Speaker 3: a good idea to pay members of Congress more. I
Speaker 3: think it might help recruit some people who were not
Speaker 3: already wealthy to enter Congress. I think in general, top
Speaker 3: performing government employees should be paid more too, and make
Speaker 3: it is you're made to fire the poor performers. Though
Speaker 3: I don't I don't understand when we want to go
Speaker 3: into politics. It sounds like miserable to me to be
Speaker 3: a member of Congress. My lizard brain can't crack those incentives.
Speaker 1: Necessarily, it is worth directing some attention to politicians' latitude
Speaker 1: to do things that people might want to bribe them
Speaker 1: to do. So, the more personal discretion of politician has,
Speaker 1: the more it's worth bribing them.
Speaker 2: So.
Speaker 1: One of the interesting things about tariffs is that if
Speaker 1: you put a large tariff on importers, it's then worth
Speaker 1: a great deal of money to particular importers to be
Speaker 1: exempt from that tariff. I mean, it keeps changing. But
Speaker 1: there was this huge tariff on electronic goods coming from China,
Speaker 1: and then it's like, oh, actually, you know, we're not
Speaker 1: going to levy that on iPhones. So Apple benefits from that.
Speaker 1: And I'm not saying, oh, Apple bribed the president. I
Speaker 1: don't have any particular reasons to believe they did. But
Speaker 1: the point is that when you've got that sort of
Speaker 1: personal discression, it becomes hugely valuable, and those interest groups
Speaker 1: are willing to pay a lot of money, and so
Speaker 1: there's the temptation for bribery.
Speaker 2: One of the big differences between first world and third
Speaker 2: world countries is how prevalent bribery is kind of in
Speaker 2: the way that governments function. And yet a lot of
Speaker 2: so called first world countries and second world countries there's
Speaker 2: a lot of bribing and corruption and cheating that goes
Speaker 2: on no matter what. So sure, it would be amazing
Speaker 2: if somehow we could create the an incentive structure where
Speaker 2: that doesn't happen. But I don't see from a psychological standpoint,
Speaker 2: how the same type of personality that wants to become
Speaker 2: a politician and who's successful as a politician, who kind
Speaker 2: of wheels and deals as a part of what they
Speaker 2: did to get there, how they would ever be totally
Speaker 2: above everything and rise to the heights of government needed
Speaker 2: to exert real influence. It's a very cynical tick, but
Speaker 2: that's how I see it.
Speaker 1: Maria, you mentioned developing countries. This was perceived as being
Speaker 1: a particular problem in Africa, both for historical reasons and
Speaker 1: because a lot of Sub Saharan African countries are very,
Speaker 1: very poor. And so this amazing African entrepreneur called mo Ibrahim,
Speaker 1: who made a huge amount of money in telecommunications in
Speaker 1: the nineteen nineties, became a billionaire. He announced the mo
Speaker 1: Ibrahim Prize he was going to give. It was millions
Speaker 1: to any African leader who surrendered power after losing a
Speaker 1: democratic election. This is about twenty years ago. I was
Speaker 1: googling around. I think the price has been paid at
Speaker 1: least once, but I haven't been able to find any
Speaker 1: survey of whether it's made a difference. But I just
Speaker 1: think it's a clever idea, whether or not it worked
Speaker 1: in practice, it's a clever idea.
Speaker 3: Didn't Sam Beakmin Freed want to pay your bribe Danald
Speaker 3: Trump like a billion dollars not to run for reelection?
Speaker 3: Or something like that.
Speaker 1: Justcas Sam Bangmuanfreed wanted to do it doesn't mean it's
Speaker 1: a bad idea.
Speaker 3: Might I might color my priors a little bit.
Speaker 1: I'd say fair.
Speaker 2: Fair Sometimes you know a broken clock is right twice
Speaker 2: a day. Let's take another question now from Jordan, and
Speaker 2: this one was directed to you, Tim. So first, Jordan
Speaker 2: loves your podcast and has listened to every episode you've
Speaker 2: put out.
Speaker 1: Good to hear, so keep up the.
Speaker 2: Great work and thank you. Jordan is a dedicated phantom.
Speaker 3: It's a lot of episodes it I like it.
Speaker 2: I love your podcast too, but I've missed some. I
Speaker 2: have to admit.
Speaker 1: They're all available on cat shop. So what is Jordan's question?
Speaker 2: Yes, it's about penalty kicks, so if you don't move,
Speaker 2: you're more likely to save them. I wonder about that,
Speaker 2: since if a goalie never moves, then wouldn't the kicker
Speaker 2: behave differently and make it easier to save shots that
Speaker 2: don't go down the middle. I was just thinking about
Speaker 2: it and was wondering how that was controlled.
Speaker 1: For Actually, you two are the perfect people to answer
Speaker 1: this question because it's about game theory, optimality and trying
Speaker 1: to exploit suboptimal behavior in a soccer penalty. Basically, you've
Speaker 1: just got a striker trying to score a goal. You've
Speaker 1: got the goalkeeper standing there, and they can kind of guess.
Speaker 1: They can dive to the left, or they can dive
Speaker 1: to the right, and there's really a fifty to fifty
Speaker 1: they'll guess right, or they could just kind of not
Speaker 1: dive at all and stand in the middle, which makes
Speaker 1: them look passive and like they're not even trying. However,
Speaker 1: it turns out that because goalkeepers don't stand in the
Speaker 1: middle because it makes them look passive, some strikers have
Speaker 1: figured out, oh, if I just boot the ball straight
Speaker 1: at the goalkeeper, they are guaranteed to dive to the
Speaker 1: left or right, and I'm going to kick where they
Speaker 1: were anyway. So Jordan's question is, well, hang on, if
Speaker 1: the strikers figure that out, aren't the goalkeepers also going
Speaker 1: to figure it out. So it's really a question of
Speaker 1: people adapting to each other's strategy and the optimal mix
Speaker 1: of strategies, and you know who better than you two
Speaker 1: to explain the details.
Speaker 2: I mean, that is such a fascinating element of game
Speaker 2: theory that Nate and I talk about quite often, which
Speaker 2: is kind of this recursive element of it. Right if
Speaker 2: I know that you know that, I know that you know,
Speaker 2: And in poker this happens all the time where you're
Speaker 2: trying to figure out, you know, how do I adjust
Speaker 2: to my opponent. If we're both playing GTO game theory
Speaker 2: optimal poker, then technically you know we're we're both executing
Speaker 2: a strategy perfectly. But humans aren't computers and that doesn't happen. Right,
Speaker 2: So if I figure out, for instance, that Nate is
Speaker 2: calling too often, then I should start, you know, changing
Speaker 2: my strategy away from GTO. So even if in this
Speaker 2: particular spot, game theory says that I should check because
Speaker 2: my hand is a little too weak to bet for value,
Speaker 2: I bet again because I know that Nate is gonna
Speaker 2: call me again with a worse hand because he overcalls, right,
Speaker 2: So I'm kind of adapting to his behavior. Now, Nate
Speaker 2: is a smart who also knows a lot about game theory.
Speaker 2: So what if Nate then figures out that I'm doing
Speaker 2: this right because we get to show down and he's like, Maria,
Speaker 2: how did you bet three times with you know, bottom pair?
Speaker 2: This is crazy? You were right, you won, but Nate
Speaker 2: figures out that, oh, I'm overcalling, so now she's actually
Speaker 2: playing differently. So now I'm going to change my strategy
Speaker 2: to adjust to that. So next time I actually try
Speaker 2: to do that, Nate ends up having just the nuts right,
Speaker 2: the best hand ever. And when I have a good hand,
Speaker 2: you know, he folds right. So he's now adjusted, and
Speaker 2: I say, oh wait, wait, wait, okay, he's changed, so
Speaker 2: now I need to change. And with two good players,
Speaker 2: this process can go on indefinitely, and sometimes you psyche
Speaker 2: yourself out right and you start getting into mind games,
Speaker 2: and sometimes you end up overthinking and just making the
Speaker 2: wrong decision. Also, you're making assumptions about the other person, right,
Speaker 2: and how the other person is seeing you and how
Speaker 2: they're adjusting. Now I'm talking about poker, because I know
Speaker 2: poker and I don't know soccer. But this is exactly
Speaker 2: kind of the problem that you have in this saga question.
Speaker 1: In theoretical terms, as an academic would analyze it, you
Speaker 1: get to an equilibrium, and the equilibrium is a mixed
Speaker 1: strategy where it's unpredictable. So for example, the striker might
Speaker 1: go left forty five percent of the time, go right
Speaker 1: forty five percent of the time, stick it down the
Speaker 1: middle ten percent of the time, and the goalkeeper might
Speaker 1: stay in the middle twenty percent of the time and
Speaker 1: go left forty percent and go right forty percent. But
Speaker 1: the point is they can't be predictable. If they were predictable,
Speaker 1: that could be exploitable, and they can't just be unpredictable
Speaker 1: in a foolish way. So it's like, oh, I could
Speaker 1: dive to the right fifty percent and to the left
Speaker 1: fifty percent and never stand up in the middle. Well,
Speaker 1: that's unpredictable, but it's also not smart because actually I
Speaker 1: need to keep the striker honest and sometimes stand up. Absolutely,
Speaker 1: there's always an equilibrium, but that equilibrium will involve a
Speaker 1: randomized mixture of strategy, right.
Speaker 2: But in practice, so this is called randomization, right, the
Speaker 2: human is very bad at randomizing randomly. Most humans will
Speaker 2: end up having a pattern and will end up actually
Speaker 2: doing one thing more than they're supposed to do, right,
Speaker 2: doing another thing less than they're supposed to do, because
Speaker 2: they're not optimal game theoreticians.
Speaker 1: There was actually a recent example where the English keeper
Speaker 1: Jordan Pickford, in a high stakes penalty shootout, had a
Speaker 1: water bottle with a list of every player on the
Speaker 1: opposing team and whether he should dive to the left
Speaker 1: or to the right, or stand up for that player.
Speaker 1: So they had previously analyzed the play. His coaches had
Speaker 1: basically pre randomized. It's a little risky, so as long
Speaker 1: as nobody finds your water bottle ahead of time, you
Speaker 1: can pre randomize. And I think he saved some goals
Speaker 1: and England won that particular penalty shootout, which is very
Speaker 1: un English.
Speaker 2: That's great.
Speaker 3: If you don't think that athletes are thinking about the
Speaker 3: stuff professional athletes, then then you're wrong.
Speaker 1: Right.
Speaker 3: They may have their coaching staffs encouraging them to do it,
Speaker 3: they may talk about themselves. They may even do some
Speaker 3: of the stuff like fairly intuitively. Right, in an NBA game,
Speaker 3: you have five players and twenty four seconds on the
Speaker 3: shot clock, So it's kind of a game of like
Speaker 3: trying to maximize your expected value with the best shot
Speaker 3: you can, but the defense is trying to minimize your
Speaker 3: expected value. And like the decisions these players make are
Speaker 3: usually pretty smart about, like it's not quite worth taking
Speaker 3: this shot, but now time's running out, and now I
Speaker 3: need to you know, I think a lot of I
Speaker 3: am actually quite high IQ. Frankly, there's a lot of
Speaker 3: money and competitive pride on the line in making the
Speaker 3: right decisions.
Speaker 2: Yeah, so, Nate. Actually, Caleb has been thinking about underhanded
Speaker 2: free throws in the NBA. Here's what he says. From
Speaker 2: what I understand, some of not most players could hit
Speaker 2: a higher free throw percentage if they practiced an underhand technique. Honestly,
Speaker 2: I respect basketball pros less after learning that they don't
Speaker 2: use underhanded free throws because they think it looks goofy.
Speaker 2: It's not a winning mentality. So Nate, should NBA players
Speaker 2: switch to underhanded free throws?
Speaker 3: Yeah? Look, there probably are some libriums where strategies that
Speaker 3: are considered emasculating, right or embarrassing. Somehow it might be
Speaker 3: pursued a bit less right, although maybe that changes too. Right,
Speaker 3: You've now seen a thing in the NBA where there's
Speaker 3: a lot more flopping than there once was, meaning that
Speaker 3: when guys get foul, they'll exaggerate the magnitude of what
Speaker 3: actually happened to them. Right, it used to be something
Speaker 3: people associated with soccer. It's migrated into the NBA as well.
Speaker 3: But Yeah, sometimes to take strategies that would be seen
Speaker 3: as embarrassing. There's expected value there if you don't care
Speaker 3: about the embarrassment.
Speaker 1: I'm curious, guys, is that an example in Poka of
Speaker 1: a strategy that is positive expected value but everyone thinks
Speaker 1: it's just embarrassing it only an idiot would do it.
Speaker 2: Yeah, there's one that has turned out to be much
Speaker 2: better than people thought. And it's called dunk betting, which
Speaker 2: is leading into the preflop raiser. And so the reason
Speaker 2: it's called dunk betting is because people thought you were
Speaker 2: a dunk donkey if you did it right, because the
Speaker 2: established wisdom is you always check to the pre flop raiser.
Speaker 2: And once we got more advanced game theory, it turns
Speaker 2: out that no, actually there are some spots where you should.
Speaker 1: Lead what is leading into a pre flop raiser.
Speaker 2: Betting first, right, instead of checking your options so that
Speaker 2: letting the other person act you act first. You bet first.
Speaker 2: To this day, though, even though it's now accepted, if
Speaker 2: someone does it right away, it still feels donkeysh even
Speaker 2: when it's not right. It's very hard to kind of
Speaker 2: wrap your mind around the fact that this might actually
Speaker 2: be the correct play.
Speaker 3: One other play that can be hard to make is
Speaker 3: folding when you've already put a lot of money in
Speaker 3: the pot and there's just a little bit more to
Speaker 3: put in and see the showdown. But still sometimes you
Speaker 3: maybe do have a fold potentially. You know, I played
Speaker 3: one unusual hand at a tournament a couple of months
Speaker 3: ago where I raise, a second player called, and a
Speaker 3: third player reraise, and if I was gonna call, I
Speaker 3: was committing about half my stack, right, which means ordinarily
Speaker 3: what you're supposed to was either fold or go ahead
Speaker 3: and go all in. However, I had a hand that
Speaker 3: I wanted to encourage the third player to enter the pot,
Speaker 3: so I just called, and I'm like, well, I'll have
Speaker 3: a lot of good flops and if I don't have
Speaker 3: a good flop then I can get away. It's a
Speaker 3: bad flop and anyway, so yeah, Like so I miss
Speaker 3: the flop, which is the first three cards in poker.
Speaker 3: He bets and I fold getting three and a half
Speaker 3: two one odds. It's like, what are you doing, man?
Speaker 3: You're not allowed to fold there, right, which indicated I
Speaker 3: think that he had a good hand and was hoping
Speaker 3: that I continued, right, But like, you know, I ran
Speaker 3: the math later and I'm like actually this is the
Speaker 3: right play by a couple of percentage points. It was
Speaker 3: just an embarrassing play to make in the moment.
Speaker 1: So I have learned no donk betting for me. And
Speaker 1: I've also learned from Nate that sometimes you have to
Speaker 1: quit whether or not you are ahead. We have to quit.
Speaker 1: We're out of time, Nate, Maria. This has been such fun.
Speaker 3: Thank you so much, Tim.
Speaker 2: Thank you for having us.
Speaker 1: Tim, I always love listening to Whiskey Business, and thank
Speaker 1: you so much for joining us on Calltionary Questions.
Speaker 3: Thank you, Tim. We'll do it again sometime. Thank you.
Speaker 1: I will be back next week with another cautionary tale.
Speaker 1: Cautionary Tales is written by me Tim Harford, with Andrew Wright,
Speaker 1: Alice Fines, and Ryan Dilly. It's produced by Georgia Mills
Speaker 1: and Marilyn Rust. The sound design and original music are
Speaker 1: the work of Pascal Wise. Additional sound design is by
Speaker 1: Carlos San Juan at Brain Audio. Bend A daph Haffrey
Speaker 1: edited the scripts. The show features the voice talents of
Speaker 1: Melanie Guttridge, Stella Harford, Oliver Hembrough, Sarah jupb Messam Monroe,
Speaker 1: Jamal Westman, and rufus Wright. The show also wouldn't have
Speaker 1: been possible without the work of Jacob Weisberg, Gretta Cohene,
Speaker 1: Sarah Nix, Eric Sandler, Carrie Brody, Christina Sullivan, Kira Posey,
Speaker 1: and Owen Miller. Cautionary Tales is a production of Pushkin Industries,
Speaker 1: recorded at Wardour Studios in London by Tom Berry. If
Speaker 1: you like the show, please remember to share, rate and review.
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