Playing Poker with Game Theory
http://www.newyorker.com/reporting/2009/03/30/090330fa_fact_wilkinson
http://www.sitandgoplanet.com/multitable/mtt_strategy/Poker_Game_Theory.html
In the year 2000 Chris Ferguson won over 1 million dollars in a poker tournament, he was the first person ever to do so. The first article sited above explains how Ferguson, a UCLA graduate student at the time, decided that he would apply his knowledge of game theory to poker to see what would happen. It was a smart move.
Ferguson is quoted in the article as saying that game theory protects him from making intuitive judgments. He relies on it to tell him what to do in a multitude of circumstances where normally one would go by their gut instincts. As we spoke about in class, by using game theory you can predict reasonably well the outcome of a given situation based on the payoffs of each player in each circumstance.
The second source linked above describes a few of the actual strategies that make use of game theory for playing poker. One of said theories is the ‘Nash Equilibrium’ system which is an “unexploitable” strategy. That means that if you follow the strategy then “no opponent can gain an advantage in terms of chips over you”. This makes it a very useful system!
I found all of this poker talk particularly interesting because it takes a strategy (game theory), one that is normally spoken about in classrooms or for economic purposes, and brings it right to Vegas. The amount of people that could benefit from studying these strategies that probably never thought to do so is enormous. However, the second website also mentions how important it is to have a good understanding of mathematics and these strategies before using them. One must adjust their play when an opponent makes a mistake “compared to the mathematical norm”. Doing this requires a lot of practice and so I could see many people trying this strategy and having it not work for them.
It also mentions how applying poker game theory is even more effective against weak opposition. If you are a beginner at the game then you would not have built up a plethora of strategies which would make it even easier for a person using game theory to predict your moves and therefore what they should play.
In conclusion, paying attention in lecture can result in winning millions of dollars 😉