Going Full Tilt - Decision Making Lessons From The Poker Table

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High quality decision-making always produces more success in the long-term than skill alone.

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Introduction

Poker has often been referred to as a metaphor for life. In essence, it is a game that draws upon strategy, luck and decision-making. All things being equal with strategy and luck, a good decision maker in poker will be more successful in the long run. This is no different in the business world and, more broadly in life.

There is a concept of ‘tilt’ in poker. When a player becomes hijacked by their emotions (is on tilt) and is no longer thinking rationally, their decision-making and play becomes suboptimal. In business, when we solely rely on our emotions and intuition to make important decisions, it can also result in less that optimal outcomes.

Being more aware of your thoughts, emotions and their corresponding impact on your behaviours and decision-making allows you to be a better problem-solver.

Going full tilt

The concept of tilt in poker is one that’s incredibly universal and it can apply to many different situations. In short, it means that you’re letting emotions – incidental emotions that aren’t actually integral to your decision-making process – affect your decision-making.

When you’re on tilt, you are no longer thinking rationally. It means that you’re experiencing an emotion that is not, strictly speaking, related to your decision.

“In the right context, emotions can be powerful drivers of correct choice – the emotion just needs to be integral to the decision, rather than incidental to it.” - Norbert Schwarz

Tilting is a way to recognise and describe when your decisions are not at the same level that they normally would be.

Everyone tilts differently. While tilt can often be a negative feeling, such as anger or frustration, it can also be a positive emotion – being very happy at winning a hand, liking a playing companion, and so on.

It’s easy to imagine the tilted player as an angry monster, crushing the dice, eating cards and thumping on the table.

It’s not that simple.

Do you eat all the ice-cream?

Tilting can invoke a positive or negative emotional reaction.

Touching a hot stove makes you feel pain and anger. You try and avoid touching the hot stove in the future. By anticipating the negative emotion caused by pain, you make a more prudent choice next time around. We experience emotions for a reason, and the goal is not to stop experiencing them.

On the other hand, positive emotions can also engender such a powerful response that we often give in to our desires and cravings. The sheer thought of having ice-cream in the house elicits such a powerful dopamine response that many people simply can’t resist the urge.

Some people just shouldn’t keep ice-cream in the house. If it’s there, they just eat the whole tub. Ice-cream causes a positive tilt. No matter how much self-control you have, the desire to eat the ice-cream is so strong that you can’t resist.

“The goal is to learn to identify our emotions, analyse their cause, and if they’re not actually part of our rational decision process – and more often than not, they aren’t – dismiss them as just sources of information” - Maria Konnikova

Self-awareness and self-control are learned skills.

Learning from one of the masters

Gus Hansen has quite a reputation as a poker player – he is beyond aggressive and has lost his bankroll many times in past.

On his way to winning the Aussie Millions tournament, there was a dramatic moment of the tournament.

Gus puts a healthy raise with one of the best hands in the deck, ace-king, only to find himself in a bit of predicament – another player goes all in. Gus has him covered, that is, he has more chips than the aggressor. He knows his aggressive style means that his opponent might have worse cards than one usually does on an all-in move.

But one thing stops him: before he makes the call, he thinks about the implications of the loss. He will no longer be the table chip leader. He will not be able to play the way he wants to – he will have to move more to the defensive. His mindset will likely be off for the rest of the day, making him play worse.

So, Gus does something that most people would never do – he folds one of his strongest possible hands.

Most of the time, we are horrible at anticipating emotions. We aren’t sure how we’ll feel. What we’ll regret more. Gus shows a level far beyond the norm.

Variance, your friend and foe

The phenomenon of tilt is as old as poker. The origin of tilt is statistical variance.

Variance exists all around us in the world every day. Sometimes we’re able to take advantage of statistical variance for personal benefit and gain, and sometimes we’re on the other side of the ledger, on the receiving end of the statistical variance, causing grief or pain.

Some people get hit by lightning. Others have had the good fortune of their home remaining unscathed while bushfires ravaged all around. Many people skate through life in perfect health, while others suffer from terrible illness.

Statistical variance is the reason why there will always be random winning or losing streaks in poker.

All professional poker players operate under the assumption that luck will even out in the long run and skill will triumph. Otherwise, there would be no professional players. Long-term, the standard deviation for good and bad luck is very small.

In an individual session, luck may account for maybe 90% of outcomes. Over a month, luck may account for 10% - 15% of results, over a year it would be down to around 2% - 5%.

In work and life, you have to play the cards that you’re dealt, and you’ve got to play them in the most advantageous manner.

After all, the cards of life have no memory. Expect your ‘luck’ to always be the statistical norm and go play your best game.

Beaten up by bad beats

Tilt is most commonly caused by a ‘bad beat’. Bad beats often result in bad mental habits.

Bad beats are generally caused by a prolonged period of downward play (only perception of course) or losing despite having really strong cards.

Bad beats can result in a shift in our locus of control from internal to external. The cards went against me. Bad things are happening to me. Effectively, a victim mentality, rather than accepting that the outcome didn’t go my way this time around, but I still made a good decision.

There is no such thing as objective reality. Every time we experience something, we interpret it for ourselves.

“What you feel tells you nothing about the facts – it merely tells you something about your estimate of the facts” – Naval Ravikant

How we frame something in our head not only effects our decision-making, but also our emotional state.

Ruminating and dwelling on a bad beat, prevents players from making rational, reasoned-based decisions. This applies to many things in life and tilt is no exception. 

Playing emotionally over any period, large or small, will have terrible consequences on outcomes.

The more you let emotions take over your game, the more your decisions are going to deviate from rational ones.

“Clarity of language is clarity of thought – and the expression of certain sentiment, no matter how innocuous it seems, can change your learning, your thinking, your mindset, your mood, your whole outlook” - W H Auden

They focus your mind on something you can’t control – the cards – rather than something you can, the decision. We often ignore the fact that the most we can do is make the best possible decision with the information that we have.

Improving your decision-making game

Your current game:

Think of your decision-making game as a resting worm that is divided into three sections. 

(A)  – this is your best game. It is infrequent – you need to be at your best to achieve it

(B)  – this is the bell curve part of the worm. It’s the longest and most visible

(C)  – this is your worst game. In theory, this will also be infrequent

Your future game:

To improve your game, you need to do the following:

1. Replace your A Game with an even better A Game, an A+ Game

2. Your current A Game drifts to become your ‘new norm’

3. You need to improve your C Game so that it becomes your B Game

How can you apply these principles in your work or personal life?

• Start by trying to understand your sources of tilt. What are your triggers at work or in your personal life?

• What situations cause you to tilt negatively, potentially resulting in frustration or anger, producing a decision or outcome that you later regret?

• What situations cause you to tilt positively, where your desires and cravings become so overwhelming that you can’t resist and cave in?

• If you do end up being overcome by emotions and make an irrational decision, try to not let the situation snowball. Stop and take stock. One bad decision or poor outcome doesn’t have to manifest into a series of bad decisions

• The solution is to establish rules and processes that enable you to understand and improve your decision-making behaviours

Work through the following process when making an important decision:

1.     What is the decision that you are being required to make?

2.     What data, information and facts are at hand?

3.     What are the options? Create at least three options

4.     Write down the % probability for each option?

5.     Which option did you choose?

6.     What were your emotional reactions, thoughts and behaviours?

7.     What was the end result or outcome of the decision?

• What are the patterns that you observe over time?

• Focus on the decision-making process and not the luck. Randomness is everywhere.
  

References:

Maria Konnikova Poker Maths Solving Tilt