Book: Squares and Sharps, Suckers and Sharks
Author
Joseph Buchdahl
Summary
An analysis of the science, psychology and philosophy of gambling.
Takeaway
Gambling is the speculation on the future that can take on different forms such as casino games, sports betting, and financial investing. Outcomes in these areas are hard to predict and it is even harder to make money from it against benchmarks that encapsulate the collective information of large crowds. Gamblers often underestimate the randomness that determine gambling outcomes and attribute positive outcomes to their own ability to predict the future.
Despite the fact that gambling is only lucrative for a negligible number of skilled gamblers, people continue to gamble. This might be related to the human desire to explain and control outcomes to instill a sense of certainy in an uncertain world.
Quotes
“According to this hypothesis, if reward uncertainty was not a source of motivation most predictive behaviours would extinguish because of the high failure rate. In other words, allowing an animal to persevere in a task is only possible if its behavior is motivated by a lack of predictability rather than the reward itself."
“If the purpose of gambling is to achieve authority over uncertainty, to feel in control of one’s destiny, surely everyone who plays sensibly and reasonably is a winner."
“Where luck is dominant, there is very little connection between the process and the outcome. If all you care about is outcomes, you’re liable to draw erroneous conclusions. On the contrary, don’t study winners to see what caused them; study the process to see whether it consistently led to success."
