Precisely, my argument is that high stake bettings can transform a game of skill inti a game of luck
I tried to decribe some mechanisms why it can occur in a further comment on my blog.
A chess tournament produces bits of information: who won which game. If most of those bits can be causally linked to skill differentials between players, rather than chance, Gil calls it a game of skill. Otherwise, luck. If stakes are high and zero-sum, players start trying to find weaker opponents. This means each game will be between players of roughly equal ability, so skill differentials cease to contribute bits to the bottom line.
Gil, is that right? If so, I apologize for misunderstanding at first. This sounds interesting.
It’s not a matter of being clearer; you didn’t say anything like the paragraph cousin_it wrote above. You have to show some intermediate steps here, because it looked to me that you were claiming that the same two opponents would have different probabilities of outcomes depending on the stakes of the game, without any explanation of why this should be so.
If you’re indeed talking about the selection bias for players as stakes change (and more or less an “efficient market” hypothesis near the top), you needed to say something in that direction.
Yes, indeed i am talking about selection bias for players as stakes change. When the stakes are higher if players are rational then the selection bias will lead to them to have similar skills, and this means the game turning more into a game of luck, unless.. some players without adequete skills are playing just by gambling effect, and this also pushes the game into a game of luck—of a different nature
Well, as someone else has noted here, this still doesn’t correspond to our usual meanings of skill and luck. I mean, I’m equally likely to beat or lose to you in a game of Candyland, and Federer and Nadal are (very roughly) equally likely to win at tennis, but the two situations aren’t equivalent, since you could replace me with your 4-year-old niece at Candyland and have the same probabilities, but not so much with the tennis example. This is why most of us call Candyland a game of luck and tennis a game of skill (with a small amount of luck involved); the degree of skill is determined by how much the probabilities of outcomes depend on certain measurable and robust characteristics of the players.
I don’t know, but I suspect that you have some strong ethical boundaries regarding the “skill/luck” line, so that you’ve identified it with a “good/bad” line; tennis is “good” because few people lose their livelihood trying to succeed at it, so it must be “skill”, while poker is “bad” because a large number of people lose their savings playing it, so it must be “luck”. But you need to be aware that there’s a rather uncontroversial way that most of us use the terms “skill” and “luck”, and that your usage violates it.
Dear Orthonormal, You are partially correct. it may be true that the way I use game of skill/luck it is not the ususal one, but it is a reasonable way, more solid, in my opinion, from the point of view of game theory/economics, and more importantly, it is relevant to the usage in the relevant laws which was meant to define what gambling is, and to common wisdon regarding gambling
The conventional way does not give you a way to measure the ingredients of skill and luck, and it treats the bare game without taking into account the entire scenario, the game, the betting, the winners, the enterance fees, etc
When you try to determine what is a gambling activity and what is not, looking just at the bare game is insufficient
the common wisdom regarding these 50 years old poker clubs in J-m is that what was going on there was a gambling activity
Aumann proposed a loophole in the legal definition of gambling based on luck and skill ingredients
However, if you examine the situation carefully you realize that the usual meaning about what is game of luck/skill is insufficient, and is not compatible with the usual meaning of what is a gambling activity. A more careful analysis based on the entire scenario is more appropriate
In any case, the difference is not between tennis and poker, and it is not based on ethical boundaries (I do not have strong opinions about whether gambling should be legal). The difference is between high stakes negative- expected-rewards games and high stakes games
where players expect positive rewards
In any case, the difference is not between tennis and poker, and it is not based on ethical boundaries (I do not have strong opinions about whether gambling should be legal). The difference is between high stakes negative- expected-rewards games and high stakes games where players expect positive rewards
That’s absolutely fine. Just don’t call it skill versus luck. Come up with new words to express the concepts you think are important; these names are taken.
The conventional way does not give you a way to measure the ingredients of skill and luck
Yes it does; one piece of evidence that tennis involves less luck than golf is that in match-play tournaments of about the same size, you’re much more likely for a golfer outside the top 10 to win than for a tennis player outside the top 10 to win.
Or that baseball involves more luck than basketball, because a streak of (say) 27 wins in 30 games is much more common for a top team in basketball than baseball.
(Yes, there are differences in how level various playing fields are, but these phenomena seem to be robust across competition in high school, college and professional levels (AFAICT), so it seems like strong evidence to me. If it were important to me, I could start finding more and more objective metrics of skill versus luck in various games.)
Very good. The conventional ways you propose to measure luck and skill ingredients are precisely the same as what I would use.So my notions are consistent with the usual ones. When you say that baseball involves more luck that basketball your notion depend on the entire scenario and reward systems and not just on the rules of the games precisely as I suggest
the new ingredient in my analysis is that these measures may not be robust if we change the reward system.
Perhaps a better way to explain myself is by looking at what I’d consider a sign of how much skill is involved in a game: roughly speaking, how many different strata of players are there for a widely played game, where each stratum can beat the stratum below (let’s say) 90% of the time? There’s only one stratum for Candyland, and at most three (humanly speaking) for tic-tac-toe, but numerous strata for a game like tennis.
So we can think of luck-vs-skill also in the sense that tennis is more stratified than golf, because a few PGA players have a 10% or better chance of beating Tiger on a given weekend, and many PGA players have a 10% or better chance of beating one of those players, and a top amateur or college golfer has a 10% chance of beating one of those players, and so on down; while there seem to be more layers than that in tennis.
Now, high-stakes games can cause a selection bias wherein all lower strata will withdraw from a competition, but this doesn’t change the components of skill and luck for that game; if you forced the withdrawing players to play for those high stakes, you’d see similar results as you’d see for low stakes (neglecting psychological effects of the fear of a bigger loss, but your analysis doesn’t seem to incorporate these). The usual concepts of skill and luck are defined by what would happen if X played against Y; your analysis is about something else, which determines whether X plays in the first place. So please call it something else.
So my notions are consistent with the usual ones. When you say that baseball involves more luck that basketball your notion depend on the entire scenario and reward systems and not just on the rules of the games.
No. Orthonormal said nothing of the sort. He just listed ways to check whether a game is skill or luck based, and didn’t claim that the critical factor is the reward system.
I suggest you spend less effort trying to look like you were right all along and just admit, “Okay, I used the terms differently from how they’re normally used.” Is it really that hard? It’s the least you could do given such a misleading title.
There is no reason for bets to be of zero expected money. Just bet around zero expected utility of money. The whole argument might be a characterization of this bizarre betting rule, but not of the games themselves.
But what do you mean by “luck”? I am wondering if there is a translation problem here, and a Hebrew word that does not quite map onto the English one. In English it simply means random factors outside the control of the participants. (It is often accompanied by a superstition that it isn’t random but a fickle force that can be attracted or repelled by suitable behaviours.) In that case roulette is entirely luck, poker is partly luck and partly skill (but less luck and more skill the better you are at it and the longer you play), and chess has very little luck. All regardless of the stakes.
The case of the poker club in Jerusalem was presumably conducted in Hebrew. Did the judge simply decide that the activity in question was a social evil that had to be found illegal whatever the letter of the law, or did the law allow itself to be read as supporting the ruling?
Well, in hebrew the meaning is the same. Regarding the poker club in Jerusalem indeed Aumann felt that the judge did not follow the letter of the law but rather his own perception of right and wrong. I offered an explanation why the judge ruling is consistent with the law
I think the difference between our opinions is that you regard the part of poker that is luck and the part that is skill as intinsic property of poker, and perhaps also of how long is the game. In my opinion, just as longer games make the skill element higher there are other ingredients (such as high stakes; winner takes all, and more) that push the skill element down
Gil, how exactly do you define game of luck vs game of skill? For example, you write:
For example, if players are playing even-bets chess games then a major effort of the players will be to choose opponents with lower or equal skill level. This will push the betting to be primarily between players of equal skills with roughly the same probability to win.
So does your definition imply that if players are evenly matched, the game is about luck? Doesn’t look very intuitive to me.
Precisely, my argument is that high stake bettings can transform a game of skill inti a game of luck I tried to decribe some mechanisms why it can occur in a further comment on my blog.
Folks, I got Gil’s argument at last. Woohoo!
A chess tournament produces bits of information: who won which game. If most of those bits can be causally linked to skill differentials between players, rather than chance, Gil calls it a game of skill. Otherwise, luck. If stakes are high and zero-sum, players start trying to find weaker opponents. This means each game will be between players of roughly equal ability, so skill differentials cease to contribute bits to the bottom line.
Gil, is that right? If so, I apologize for misunderstanding at first. This sounds interesting.
Precisely, this is what I meant. Sorry for not being clearer.
It’s not a matter of being clearer; you didn’t say anything like the paragraph cousin_it wrote above. You have to show some intermediate steps here, because it looked to me that you were claiming that the same two opponents would have different probabilities of outcomes depending on the stakes of the game, without any explanation of why this should be so.
If you’re indeed talking about the selection bias for players as stakes change (and more or less an “efficient market” hypothesis near the top), you needed to say something in that direction.
Yes, indeed i am talking about selection bias for players as stakes change. When the stakes are higher if players are rational then the selection bias will lead to them to have similar skills, and this means the game turning more into a game of luck, unless.. some players without adequete skills are playing just by gambling effect, and this also pushes the game into a game of luck—of a different nature
Well, as someone else has noted here, this still doesn’t correspond to our usual meanings of skill and luck. I mean, I’m equally likely to beat or lose to you in a game of Candyland, and Federer and Nadal are (very roughly) equally likely to win at tennis, but the two situations aren’t equivalent, since you could replace me with your 4-year-old niece at Candyland and have the same probabilities, but not so much with the tennis example. This is why most of us call Candyland a game of luck and tennis a game of skill (with a small amount of luck involved); the degree of skill is determined by how much the probabilities of outcomes depend on certain measurable and robust characteristics of the players.
I don’t know, but I suspect that you have some strong ethical boundaries regarding the “skill/luck” line, so that you’ve identified it with a “good/bad” line; tennis is “good” because few people lose their livelihood trying to succeed at it, so it must be “skill”, while poker is “bad” because a large number of people lose their savings playing it, so it must be “luck”. But you need to be aware that there’s a rather uncontroversial way that most of us use the terms “skill” and “luck”, and that your usage violates it.
Dear Orthonormal, You are partially correct. it may be true that the way I use game of skill/luck it is not the ususal one, but it is a reasonable way, more solid, in my opinion, from the point of view of game theory/economics, and more importantly, it is relevant to the usage in the relevant laws which was meant to define what gambling is, and to common wisdon regarding gambling
The conventional way does not give you a way to measure the ingredients of skill and luck, and it treats the bare game without taking into account the entire scenario, the game, the betting, the winners, the enterance fees, etc
When you try to determine what is a gambling activity and what is not, looking just at the bare game is insufficient the common wisdom regarding these 50 years old poker clubs in J-m is that what was going on there was a gambling activity Aumann proposed a loophole in the legal definition of gambling based on luck and skill ingredients However, if you examine the situation carefully you realize that the usual meaning about what is game of luck/skill is insufficient, and is not compatible with the usual meaning of what is a gambling activity. A more careful analysis based on the entire scenario is more appropriate
In any case, the difference is not between tennis and poker, and it is not based on ethical boundaries (I do not have strong opinions about whether gambling should be legal). The difference is between high stakes negative- expected-rewards games and high stakes games where players expect positive rewards
That’s absolutely fine. Just don’t call it skill versus luck. Come up with new words to express the concepts you think are important; these names are taken.
Yes it does; one piece of evidence that tennis involves less luck than golf is that in match-play tournaments of about the same size, you’re much more likely for a golfer outside the top 10 to win than for a tennis player outside the top 10 to win.
Or that baseball involves more luck than basketball, because a streak of (say) 27 wins in 30 games is much more common for a top team in basketball than baseball.
(Yes, there are differences in how level various playing fields are, but these phenomena seem to be robust across competition in high school, college and professional levels (AFAICT), so it seems like strong evidence to me. If it were important to me, I could start finding more and more objective metrics of skill versus luck in various games.)
Very good. The conventional ways you propose to measure luck and skill ingredients are precisely the same as what I would use.So my notions are consistent with the usual ones. When you say that baseball involves more luck that basketball your notion depend on the entire scenario and reward systems and not just on the rules of the games precisely as I suggest the new ingredient in my analysis is that these measures may not be robust if we change the reward system.
Perhaps a better way to explain myself is by looking at what I’d consider a sign of how much skill is involved in a game: roughly speaking, how many different strata of players are there for a widely played game, where each stratum can beat the stratum below (let’s say) 90% of the time? There’s only one stratum for Candyland, and at most three (humanly speaking) for tic-tac-toe, but numerous strata for a game like tennis.
So we can think of luck-vs-skill also in the sense that tennis is more stratified than golf, because a few PGA players have a 10% or better chance of beating Tiger on a given weekend, and many PGA players have a 10% or better chance of beating one of those players, and a top amateur or college golfer has a 10% chance of beating one of those players, and so on down; while there seem to be more layers than that in tennis.
Now, high-stakes games can cause a selection bias wherein all lower strata will withdraw from a competition, but this doesn’t change the components of skill and luck for that game; if you forced the withdrawing players to play for those high stakes, you’d see similar results as you’d see for low stakes (neglecting psychological effects of the fear of a bigger loss, but your analysis doesn’t seem to incorporate these). The usual concepts of skill and luck are defined by what would happen if X played against Y; your analysis is about something else, which determines whether X plays in the first place. So please call it something else.
No. Orthonormal said nothing of the sort. He just listed ways to check whether a game is skill or luck based, and didn’t claim that the critical factor is the reward system.
I suggest you spend less effort trying to look like you were right all along and just admit, “Okay, I used the terms differently from how they’re normally used.” Is it really that hard? It’s the least you could do given such a misleading title.
I think you mean, “Sorry for not being clearer despite using over 15 times as many words.”
There is no reason for bets to be of zero expected money. Just bet around zero expected utility of money. The whole argument might be a characterization of this bizarre betting rule, but not of the games themselves.
But what do you mean by “luck”? I am wondering if there is a translation problem here, and a Hebrew word that does not quite map onto the English one. In English it simply means random factors outside the control of the participants. (It is often accompanied by a superstition that it isn’t random but a fickle force that can be attracted or repelled by suitable behaviours.) In that case roulette is entirely luck, poker is partly luck and partly skill (but less luck and more skill the better you are at it and the longer you play), and chess has very little luck. All regardless of the stakes.
The case of the poker club in Jerusalem was presumably conducted in Hebrew. Did the judge simply decide that the activity in question was a social evil that had to be found illegal whatever the letter of the law, or did the law allow itself to be read as supporting the ruling?
Well, in hebrew the meaning is the same. Regarding the poker club in Jerusalem indeed Aumann felt that the judge did not follow the letter of the law but rather his own perception of right and wrong. I offered an explanation why the judge ruling is consistent with the law
I think the difference between our opinions is that you regard the part of poker that is luck and the part that is skill as intinsic property of poker, and perhaps also of how long is the game. In my opinion, just as longer games make the skill element higher there are other ingredients (such as high stakes; winner takes all, and more) that push the skill element down
Gil, how exactly do you define game of luck vs game of skill? For example, you write:
For example, if players are playing even-bets chess games then a major effort of the players will be to choose opponents with lower or equal skill level. This will push the betting to be primarily between players of equal skills with roughly the same probability to win.
So does your definition imply that if players are evenly matched, the game is about luck? Doesn’t look very intuitive to me.