taking the mountain by backgammon strategy
what you don't know can make you look silly
Lots of stuff on the pad – I really must point everyone in the direction of Henry Farrell’s post on weaponisation of the US banking system – but I think Fridays here ought to be for lighter and shorter posts, so now for something completely different.
If you want to understand how badly set up human beings are to think about probability and optionality, go on the app store or Google Play, search for a backgammon app and look at the comments.
What you will see is a lot of people who believe that the app cheats. Nobody asks themselves questions like “why would anyone write an app that cheats at backgammon?”, but they are convinced that it does. The evidence being that time after time, the app seems to get exactly the dice roll that it needs in order to win, to destroy the opposing position, to get out of a trap, or so on.
There’s actually a simple explanation for this, which is simply that the people making these complaints are crap at backgammon. Because they are crap at backgammon, they aren’t able to see that in most of these cases, there were three or four other possible dice rolls which would have left them just as screwed.
Backgammon is a popular game with options traders, for exactly this reason. The skill of the game is in constructing positions which benefit to the greatest extent possible from the uncertainty. Winning backgammon is all about preserving optionality; rather than pursuing a specific line of strategy, you need to give yourself lots of different ways to win. As I once read in a book on the game, “when faced with a choice between A and B, spend most of your thinking time looking for C which is better than either”.
I think there’s a lot of this “counterfactual-blindness” that goes on in other walks of life. A lot of the time, people are assumed to have an ability to foretell the future and anticipate trends. When what they’re actually doing is investing in a lot of strategic assets, giving themselves a lot of options, and then taking advantage when one of the possibilities pans out. Brian Eno, as far as I can tell, is extraordinarily good at this.
Well described on Backgammon - you see a lot of similar frustration when two human players are at different skill levels, the lower skilled player is often frustrated by how the end game pans out from an apparently ok situation to a loss very quickly.
Your last paragraph slides in a big sting about life though. "Investing in lots of strategic assets" is one of those things that is a lot easier to do when you have a lot of resources to invest.
Backgammon players routinely laugh at poker players' bad beat stories. "Oh, your opponent hit a two-outer on the river? That's adorable!" Because a game of backgammon has more turns than a hand of poker, there are plenty of opportunities for really low-probability multiroll parleys to come in.
Getting really good at backgammon involves taming your emotional response to variance. This has obvious applications to trading, but in fact it will pay dividends all over your life.