Las Vegas

Little Bastard: The Computer Poker Machine

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A fascinating piece in New York Times Magazine on the advancement of artificial intelligence in how machines play poker:

The machines, called Texas Hold ‘Em Heads Up Poker, play the limit version of the popular game so well that they can be counted on to beat poker-playing customers of most any skill level. Gamblers might win a given hand out of sheer luck, but over an extended period, as the impact of luck evens out, they must overcome carefully trained neural nets that self-learned to play aggressively and unpredictably with the expertise of a skilled professional. Later this month, a new souped-up version of the game, endorsed by Phil Hellmuth, who has won more World Series of Poker tournaments than anyone, will have its debut at the Global Gaming Expo in Las Vegas. The machines will then be rolled out into casinos around the world.

They will be placed alongside the pure numbers-crunchers, indifferent to the gambler. But poker is a game of skill and intuition, of bluffs and traps. The familiar adage is that in poker, you play the player, not the cards. This machine does that, responding to opponents’ moves and pursuing optimal strategies. But to compete at the highest levels and beat the best human players, the approach must be impeccable. Gregg Giuffria, whose company, G2 Game Design, developed Texas Hold ‘Em Heads Up Poker, was testing a prototype of the program in his Las Vegas office when he thought he detected a flaw. When he played passively until a hand’s very last card was dealt and then suddenly made a bet, the program folded rather than match his bet and risk losing more money. “I called in all my employees and told them that there’s a problem,” he says. The software seemed to play in an easily exploitable pattern. “Then I played 200 more hands, and he never did anything like that again. That was the point when we nicknamed him Little Bastard.”

Read the rest here.

On Moral vs. Contractual Obligations

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From a very good personal story in The New York Times, about a financial planner who ended up losing his house:

Borrowing that much had seemed to make sense when the value of the home was still rising substantially every year, taking our net worth higher with it. But at that point, there was no way we could sell the home for anywhere near what we owed. Some of my friends were already doing short sales, where the bank agrees to let you sell the house for less than your loan balance. I was also aware you had to be three months behind in your payments before the bank would talk to you about the possibility.

At first, I dismissed the idea of a short sale. Late that summer, I sat down with a really close friend in Las Vegas, someone I looked up to. He cut to the heart of the matter right away: Why, he wanted to know, were we still making the payments?

Because I have a moral obligation, I said. You pay your debts.

He proceeded to explain that I didn’t have a moral obligation to the bank. I had a moral obligation to my family. I had a contractual obligation to the bank, along with a clear moral obligation to be honest in my dealings. What he was asking was this: Which is more important? Your contractual obligation to the bank or your obligation to your family to preserve your ability to make a living?

I had never thought of it that way. But it made sense. I summed it up to myself like this: I have a contractual obligation to the bank (as well as a moral obligation not to skirt the consequences of breaking it: losing my house and wrecking my credit score). But my moral obligation to my family trumps the contractual obligation to the bank.

I found this paragraph particularly enlightening. Do not be quick to judge others’ financial habits:

For one thing, I am less quick to judge other people’s financial behavior. I’m also more inclined to take into account personal factors that determine how people behave around money.

I have a friend who is going through a tough time financially. He has a high income, but is burdened by debt from a few real estate deals that went south. He continues to take fairly expensive ski trips. That would seem irresponsible in his situation, and maybe they are.

But I now realize that it is not that simple. Maybe those trips are keeping the guy alive, or saving his marriage or keeping him sane enough to work.

The author of the piece, Carl Richards, is coming out with a book The Behavior Gap: Simple Ways to Stop Doing Dumb Things With Money early next year.