Is Hustling Cheating?

Let me tell you a story, one that gives you a sense of just how fascinating gambling can be, especially when skill is involved and, well, a hustle is there to be exploited. Rhiannon and I watched this little drama unfold some years ago when we lived in Brooklyn. We were heading back after a stroll along the boardwalk that runs by the beach at Coney Island. In a small city park just off the boards there are several large concrete walls, each forming the business end of a handball court. One-wall handball. I had never thought of one-wall handball as much of a gambler’s game until that day but when we stopped to watch I saw that an awful lot of the players had (typically small) bets on nearly every game.

One-wall handball is exactly what is says it is. You hit the ball with your hand and there is only one wall. The object is to hit the ball to the wall on the fly and try to do so in a manner that minimizes the chances of your opponent doing likewise. The ball may bounce once between the wall and your hand; two bounces and you lose the point. In the more sophisticated versions, the game is played in expensive, specially constructed courts that are literally large rooms where all four walls can be used, rather like squash. One-wall handball, however, is for the street not the country club.

My attention was grabbed by two guys in their mid-20’s who were playing against each other for $5 a game. They were clearly friends and had come down to get some exercise and enjoy the competition. Among the crowd of onlookers there was this big guy in a suit watching them intently. He instantly made me think of the Big Julie character in the musical Guys and Dolls. He was a good six-two, looked and sounded very Noo Yawk, and had an engaging clumsiness about him that, as I would soon see, was but a well-crafted illusion.

Julie started kibitzing with the two guys who did the usual Brooklyn thing, told him to either shut the fuck up or get in and play. Julie laughed and took off his coat. He played a decent enough game losing by just a couple of points. One thing led to another, and pretty soon Julie was also putting up $5 a game. They were playing quick 7-point games. He won a couple and he lost a couple. I was standing there grinning and whispered to Rhiannon, “watch what happens now.”

After about twenty minutes Julie had taken off his shirt and tie but was still playing in street shoes. He was also now playing singles against the other two guys at once and the stakes crept up to $20 a game. Julie was winning but usually only by a point or two.

The stakes moved to $50 for the last game. It was strictly no contest. Julie was a master. Fade shots fell like a dying quail untouched, spin shots twisted off the wall at unreachable angles, power returns flew by off-balance opponents. Julie pocketed the $100 (along with the other $100 or so he had already won), put on his shirt and tie, thanked the two guys for a terrific set of games and left. They stood there kind of bewildered, trying to figure out what hit them.

Similar little dramas occur in bowling alleys and pool halls, on golf courses and at chess boards, on basketball courts and squash courts. There is always the question of whether someone is cheating you, hustling you, or merely outsmarting you. It seems pretty clear that Big Julie is a hustler but is he a cheat? The philosopher Dan Dennett likes to introduce what he calls “intuition pumps.” So, here’s a couple:

Suppose it turns out Julie had slipped a drug into his opponents’ water, how do we feel? Here he feels like a cheat. But in the original story he doesn’t. He’s an engaging character whose skills we admire. A Julie who drugs his opponents is a crummy, low-life slug. But most of us admire the hustling Julie who wins because he is a skilled player.

Whole books have been written about characters like Julie; they have become pieces of American iconography. One of the true legends of this genre was “Titanic” Thompson, a large man of considerable wealth with an insatiable appetite for a wager.

Thompson reportedly was the first to suggest what has become the prototype of the totally nutty bet, which of two rain drops would get to the bottom of a window pane first. In his long career he concocted some of the most bizarre wagers imaginable, habitually tiptoeing along the line that separates a clever hustler from a flat-out cheat.

Thompson once bet a golfing buddy that he could drive an ordinary golf ball over 600 yards off an ordinary tee. He waited until the dead of winter to execute the wager when he proceeded to smack a ball across a frozen lake where it skidded and bounced for nearly a mile. Did Thompson cheat his friend or merely outsmart him? But suppose Thompson had won the bet by going out to a regular golf course in the middle of spring but smuggled in a juiced golf ball? Now he feels like a cheat and I don’t like him anymore.

Finally, one last thought. What do the two guys Julie took for $200 think of him?

Poker Solved

Michal Bowling and colleagues at the University of Alberta in Edmonton announced today that they have “solved” poker. Bowling’s group has been working on this problem for a number of years. In Poker, Life and Other Confusing Things I devote a chapter to their earlier work developing ‘bots’ that could beat most top poker pros. But these earlier versions weren’t provably optimal. This one is and this is an extraordinary claim worth discussing.

First, the game they’re talking about is Hold ‘em played heads-up at limit stakes with a set number of raises. If another player is added or the game is changed to no-limit the claim no longer holds.

Second, by “solve” they mean that they have developed a set of decision-making algorithms for every possible situation that are optimal for that situation. In short, no opponent could make checking, folding or raising decisions that would beat it in the long run. By “long run” is meant a sufficient number of hands for a Nash equilibrium to have been reached.[1] That is, the program cannot lose. It can only be played to what I guess we can call a draw where Cepheus (the name of the program) and its opponent both break even.

This fact leads to an interesting paradox: If two players whose games are optimal (in the sense that they use Cepheus’s strategic moves) play against each other in a card room (either in a brick and mortar casino or online) they will both eventually go broke because they will be ground down by the rake.

Several of my poker playing friends tell me they find Bowling’s group’s claims hard to believe. They note that when they play poker they play against an opponent and use knowledge gained about these very humans who are trying to take their money to make their decisions. “How,” they wonder, “can a ‘bot’ win when it can’t do this?”

The answer is that knowledge about an opponent is simply knowledge about how that individual has played in the past and how they are likely to be acting in any given situation. Cepheus has all this information and it uses it to determine the optimal move, just like a human player but with a huge edge. Unlike the human it has a effectively infinite memory and doesn’t make mistakes, doesn’t get tired, doesn’t go on tilt.

The program was developed in a fascinating way. Bowling and co-authors used what’s called a counterfactual regret minimization (CFR) heuristic — that’s techno-speak for calculating the outcomes of “gee, I wish I’d done x” on that hand. In short, after every hand Cepheus looked at the outcome and ascertained what would have happened had it done something else and what the outcome of that decision would have been.

They started from scratch. That is, they didn’t program any strategies into Cepheus; they merely gave it the rules for poker and nothing else. The point was to allow the program to evolve the decision-making metric on its own without any possible contamination by a human who might be using a non-optimal principle.

Then they let it play against itself for a trillion hands. Yes, trillion, or more hands than have been played in real life by all the humans who ever played poker, far more. Each time it adjusted its decisions based on feedback from the CFR and homed in on the action that would have maximized gain and/or minimized loss. Ultimately the set of optimal decisions emerged.

Bowling noted that Cepheus was still learning but the advances were so small that they were negligible so they stopped the operation.

They also were able to prove what every serious poker player knows, the dealer has an edge. In fact, they were able to calculate it as .088 of a big blind. That is, with optimal play, sitting on the button in a heads-up game provides a bit less than a 9% gain. This may seem small but over a large number of hands it’s significant.

From a game theoretic point of view, one of the things most exciting about this project is that it is the first time that a partial (or incomplete) information game has been solved. All the other games for which optimal strategies were developed have been full (or complete) information games like backgammon or checkers (FWIW, it was the same group at the University of Alberta that solved checkers back in 2007).

As they note the procedures they used can have real-world applications in other complex, partial information domains like medical diagnosis, auctions and security screening settings, areas where artificial intelligence (AI) programs have been developed but have proven inadequate relative to human decision-makers.

The full paper describing this accomplishment can be found here.

A nice, non-technical summary is here. This site, which is at the University of Alberta, also has a url that will link you up to Cepheus for a chance to play against it (but not for real money).

---

[1] Without getting too technical, this is essentially the point where random factors dominate the distribution of events (or, in this case, hands). In short, the luck factor has been distilled from the game and the only operations that are useful are rational ones.

The Keystone XL Pipeline

The Republicans in Congress are unanimously in favor of the Keystone pipeline. Even some Democrats support the project. Mitch McConnell said that it will be the first major bill they will put up for a vote and there are even plans afoot to rework existing legislation so that the final say would not fall to the President — in short, make the vote veto-proof. They really, really want this. When you see that kind of passion for something it’s reasonable to ask: “Why?”

Try as I may, I cannot find a single reason why it should be built. Some supporters claim it will create jobs. The best estimate of the OBM is that a mere 36 full-time, permanent new jobs will emerge. All other estimates, which range from 42,000 as the most optimistic to 3,000 as the most realistic (that one comes from the Canadian company that is behind the project), are for temporary construction jobs or ancillary work that accompanies the temporary workers. They cease as soon as the project is finished.

Now there’s nothing wrong with creating a couple thousand well-paid construction jobs, even if they are temporary ones — but don’t pretend that these represent long-term additions to the employment scene.

And don’t get too excited about those estimates. Even if the most wildly optimistic were to turn out to be right, they’d be just a drop in a bucket. Around 50,000 new jobs are being added every week — a result of a recovering economy which opponents of President Obama either ignore or misinterpret.[1]

Others claim that it will help make America energy independent. News flash: none of the oil will be extracted from American soil and none of it will be used in this country. It is all from the oil sands of Northern Alberta in Canada. It will be piped to lines in North Dakota and then south to Louisiana where it will be refined (in existing refineries with existing equipment and workers) and shipped to South East Asia, mainly China. None of this oil will be used here.

It is the dirtiest, most polluting fossil fuel adding disproportionate amounts of CO₂ to the atmosphere. It is expensive to extract from the oil sands and the process produces horrific amounts of pollutants.

Finally, the pipeline will leak or rupture. Of this you can be certain. When it does it will leak Canadian toxic sludge bound for China onto American farms and into American rivers and streams. It will be ugly.

So who wants it? Well, for one, the Koch brothers. They own a substantial hunk of the oil sands extraction companies in Alberta. For another, the major oil companies who refine the oil and sell it to their Asian customers. And, of course, the Republican (and Democratic) members of Congress who are so indebted to these special interests that they are now, basically, owned by them. Lastly, the Canadian oil barons whose finances are tied up in this unholy mess.

It will almost certainly pass in Congress. Obama has indicated he will veto it. Then we watch to see what develops.

---

[1] Arthur Laffer (the developer of Reagan’s trickle-down theory, aka “voodoo economics”) made the Laffable claim that the reason for the recovery is that the impact of Obama’s Stimulus package has finally run out. Why Stanford hasn’t revoked his Ph.D. is a mystery.

Suki Kim's Book on Teaching in North Korea

I’d like to share some thoughts on Suki Kim’s remarkable Without You There is No Us.

The book chronicles her months teaching at a college in North Korea run (and financed) by fundamentalist Christians. While this seems wildly implausible there’s a strange logic behind it. Their church paid for the construction of the campus and provides the operating budget, the equipment and the teachers. They do not proselytize (or they would be quickly removed). They teach. They believe that North Korea is the next country that God plans to free from state-imposed atheism and they want to be there to be ready to spread the word of Jesus when this happens. They run a similar school in China. They are patient. Kim was hired to teach English by gently disguising her agnosticism.  

The title is from a song sung repeatedly by her students, the “You” is the Great Leader Kim Jong-Il and the “Us” is the North Korean people.

Kim gives a remarkable, chilling insight into the black collectivist pit that is North Korea. It’s important to step back from Kim’s descriptions of her months teaching English there and appreciate, fully and depressingly, that her students and the stunted, impoverished, intellectually diminished lives they lead are, in fact, the sons of the elite. These are the future leaders of this backward land and, as she deftly chronicles, will come into positions of power and influence knowing virtually nothing.

It isn’t possible to convey the complex interlocking relationships Kim forms with her students in a simple essay. They’re marked by efforts to reach out constrained by a self-censoring. She cannot tell them too much about the outside world, it could be dangerous — to them. If they were to learn that they live as virtual prisoners in the most backward, impoverished country on the planet it would not go well for them. She cannot let them know that their “Intranet” which only links to local servers, is not the real “Internet.” They do not know and must not learn that the highways in other countries actually have many cars travelling on them, that markets are filled with fresh vegetables and fruits, that libraries exist where you can choose which book you wish to read.

She also must protect herself from prying eyes. She is accompanied by “monitors” wherever she goes. Her emails are read. All her letters are opened before posting. All the rooms have bugs. All her lessons must be cleared by “counterparts.” And, of course, she must also take care not to let her devout, occasionally fanatical Christian colleagues know of her true beliefs. The stress is crushing.

Kim is vulnerable in an oddly charming way. Some of her revelations about her insecurities and longings and unfulfilled relationships are cringe-worthy but ultimately they complete the picture: complex person, strong and resilient when she needs to be and, at other times, anything but.

But at the core is the very existence of North Korea and the life its citizens not only cannot escape from but do not, cannot, fully grasp what it is they live in. The focus is on her students all of whom are young men nineteen and twenty years old who have been sent to this college to learn — in her classes, English. They are the sons of the elite and are taking advantage of the largess of the Christian fundamentalists who are paying for everything, a significant factor in a land of crushing poverty.

A couple of things popped out at me. For one, there was an intriguing, almost paradoxical self-centered element that emerged around exam time when several of her students did not do well. Suddenly the collectivist ideals, the group mentality that marked everything they did vanished and in swept a singular focus on themselves, on the impact these grades might have on their future, what university they might be admitted to, what level of Party involvement they may be offered.  Earlier they were one, a collective fully conscious of and part of an oddly functional homo Gestalt. They dressed alike, sang, marched and ran in groups, worked together and, as Kim discovered to her surprise, would never even come to office hours without a least one friend in tow. Yet they were, at the same time, intensely competitive and when exam time arrived, they became individuals. Oddly, neither they nor Kim seem to appreciate this disconnect.

There’s also an odd acceptance of Americans as teachers, revered for their knowledge, treated with great respect and almost always referred to as “Professor.” Yet they are raised to view America as the Great Satan, the obscene embodiment of capitalism, the nurturer of wars and their eternal enemy. Daily they are bombarded with speeches, songs, news programs all repeating a litany of the evilness of America and its values, which they dutifully parrot back. Yet, they welcome Americans as respected teachers whose opinions they probe for, whose language they strive to learn, whose knowledge they seek and whose trust they long for.

Kim also describes her students as inveterate liars. They lie about everything. They tell tales of spending the weekend with their parents when she knows they are never permitted to leave the college grounds. They talk of having visited other cities when they clearly reveal that they do not know where they are. They tell of trips to China or London which are not possible. A favorite prevarication is the claim that they had been offered a scholarship to a famous university (in Singapore, Beijing or even Oxford) but they turned it down to stay at their current school in Pyongyang. When she pushes at these little fibs they use a device they’re quite fond of — they say, “let’s change the topic now and talk about something else.”

Kim wonders if this repeated twisting of the truth might not come from being raised in a society where they are lied to all the time by everyone, especially the government. This might be part of it but more likely it’s just a feeble effort at self-aggrandizing. Her young charges seem astonishingly credulous. They appear to accept at face value the most preposterous stories about their “powerful and prosperous” country which is the envy of the rest of the world and whose “Great Leader” accomplishes near miracles on a daily basis. If they do question this touted magnificence they cover themselves well. When the Great Leader Kim Jong-Il dies they are stricken speechless. They weep uncontrollably and stare hopelessly at the horizons. Their pain feels real.

The picture painted of North Korea is depressing beyond imagining. All of Kim’s experiences are with the favored elite in a select college but it is nightmarish — no heat, blackouts constantly, thin soups and wilted vegetables for meals, total control of all movements, forced labor at duties like guarding shrines, cleaning, weeding, construction, regular indoctrination sessions and endless hours at Juche, the virtual religion based on the life and deeds of godheads Kim Il-Sung and Kim Jong-Il.

Her only glimpses of the typical citizens are on road trips outside Pongyang. Though these are tightly scripted and controlled she cannot be kept from seeing the shrunken, wizened, starving poor trudging along empty highways, carrying empty bags and looking like the damned in a cheap horror movie. On these trips they often come upon small groups of people sitting in the middle of a highway sharing food. There is so little traffic that these wide, smooth roads have become a place to gather.

The photo shows the Korean peninsula at night. The single dot of light is the capital Pongyang. The row of lights to the north are in China, along the border.

At one point Kim decides to bake her students a chocolate cake and finds that she cannot find the ingredients even at the most upscale markets (which she is only allowed to enter when on an official trip with “minders” alongside her every step). There is no cake flour, no fresh currants or raisins and, of course, no chocolate to be had.

If nothing else the powers that run North Korea have found the way to keep a totalitarian state from being overthrown from within. There can be no revolution if the people truly believe that they are living in the most prosperous and successful country in the world, that their land is the envy of every other, that their Leader is revered and worshipped everywhere, that their kimchi is better than any other food and that in every country around the globe people strive to try to make a kimchi like that they are served every day — along with a watery soup, a few rancid vegetables and, perhaps once a week, a few slices of gristle and fat that once sat on the hind quarters of a pig.

Kim comes to love her charges and she should. They are fascinating, engaging, smart, caring and loving. But the gap between where they are, what they know, what they believe, what they hope for and the reality that lies beyond the borders of this strange country where some twenty-seven million souls live in a beautiful, mountainous land is so vast that it cannot be bridged. Every once in a while a glimmer in a student’s eye tells her that he has grasped a sliver of truth about their fate and a tiny flicker of understanding about what is out there but it fades quickly, to be replaced by a robotic assurance that their lives are the best that could ever be hoped for.

If these walls ever come down, if this government ever collapses the rubble that the world will find strewn across the land will be terrible. It could take a generation to recover from it.

Some Good Stuff here in 2014

There are still an awful lot of things wrong with this country and it wouldn’t take any thinking soul long to lay out a depressing litany. But oddly, as we close down 2014, it’s possible to list more than a few good things. This list was compiled surprisingly easily. What’s striking about it is that all of it, every freaking good thing came about despite the efforts of the Republicans. It’s actually quite astonishing to see how much good the supposedly useless, hated, inefficient, wasteful, bloated government has accomplished when the supposedly “loyal opposition” has done everything it could do undermine it. So, in no particular order:

Economy grew 5% in the last quarter and nearly 4% for the year.

Dow is over 18,000.

Dollar strongest currency in the world again.

Obamacare is working: over 10 million newly insured, rise in health care costs cut in half.

TARP, the auto bailout and stimulus packages all successes. All loans repaid and profits turned.

Deficit cut by three-quarters to pre-recession levels.

Job growth significant and unemployment below 6%.

Wages increased for first time since the recession.

Ebola panic panic subsided. No new cases. Turns out CDC knew what they were doing.

Bush/Cheney/Loo torture program finally made public.

Benghazi nonsense put to rest.

Slow but real progress on climate change with international cooperation involving China.

Nuclear talks with the Iranians progressing.

Diplomatic relations with Cuba restored.

Putin slowly being isolated and marginalized.

Immigration reforms beginning through executive action.

Inflation at record lows.

Gasoline prices plummeting.

Scores of federal judges appointed.

So here’s a thought: Imagine where the country would be today if the Republicans had decided to work with the Democrats rather than be disruptive?