The Poker Face; Using Game Theory to Maximize Results (Greg Dinkin).pdf

2003 TOP OF THE TABLE ANNUAL MEETING

THE POKER FACE: USING GAME THEORY TO MAXIMIZE RESULTS

Greg Dinkin

I think we all have one teacher whom we never forget. And, for me, that was Mr. Baker, seventh-

grade English. Mr. Baker had two passions, literature and discipline, but not necessarily in that

order. But his idea of discipline wasn’t detention, it was if you did something wrong, you didn’t

think critically or understand his literature, he made you stand in the corner of the room for a

half-hour with your nose to the wall.

So, one day, we were reading a short story, and the main character, or protagonist, was Bill. The

only thing you need to know about Bill is he was the only man in the village who had a gun. He

had all his prestige, all his power, all his esteem from this gun. So, one day he goes out in the

jungle, and a wild animal attacks him and he goes to fire. Somehow his gun doesn’t fire right,

and he manages, in a brilliant display of courage, to kill this animal with his bare hands. So he

goes back to the village. What does he tell everyone about what transpired? Well, that’s what

Mr. Baker wanted to know. So we took a pause in the story and said, “OK, what does Bill tell

everybody?” Well, Chrissy raised her hand and said, “Oh Mr. Baker, call on me. I know. I’m

honest. I would go tell the truth. I don’t tell lies.” Well, at that point, Mr. Baker had that vein

popping out of his forehead. He didn’t seem to like Chrissy’s answer. But Randy was like the

Arnold Horshack from “Welcome Back, Kotter.” “Oh, Mr. Baker, call on me, call on me.” He

said, “I know.” He said, “Mr. Baker, I’d go back there and tell them how brave I was. I’d really

play it up. Add a little bit of polish to the story, make it seem like it was an even bigger animal.”

Well, now Mr. Baker continued to talk, the spit started coming from his mouth. He was not

happy with Chrissy’s or Randy’s answer. And I was scared to death of this man, but I figured I’d

give it a shot. So I raised my hand, I said, “I, I, I, I, I, I’d, I’d, I’d.” And before I would finish,

Mr. Baker screams, the spit coming out of his mouth, the vein popping, “I didn’t ask you what

you would do Greg, I asked you what the character would do.” So I find myself in the corner of

the room, my nose up there, thinking about it, with Mr. Baker’s spit all over me.

I was in seventh grade, I didn’t know what to think. But it wasn’t until a few years later that I

started playing poker that I began to understand what Mr. Baker meant. The greatest lesson that I

learned from playing poker professionally is you have to see things through the eyes of others. If

you can walk in someone’s shoes, if you can walk in Bill’s shoes and say, he gets all his prestige,

all his power from having that gun, it becomes very obvious what he would do. And once you

can walk in someone else’s shoes, it makes things much easier to get what you want.

So the topic of my speech is game theory. You may have seen “A Beautiful Mind” with John

Nash, who won a Nobel Prize for it. Perhaps the prisoner’s dilemma. It combines math and

psychology to make decisions based on games. The primary insight, and I’ll say this over and

over again, is you must walk in the shoes of other people to see things from their perspective.

So why am I here? Unfortunately, we’re not going to get a chance to play poker. But I’m going

to show you how to be a better communicator. How to be a better decision-maker. The No. 1

skill, walk in another person’s shoes.

Now, there are some casinos in the Palm Springs area. I don’t know if you’ve ventured out yet,

but if you want my advice on gambling, that will come at the end of my speech. Top secret

advice, stay tuned.

Anyone see the movie “Rounders” with Matt Damon and John Malkovich? Show of hands. If

you saw the movie, you know that when John Malkovich opened up his Oreo cookie and licked

the icing, he was bluffing. It’s called a “tell.” And Matt Damon was able to figure that out. In

poker, you have all sorts of tells. Some people hold their breath if they’re bluffing. Some people

can’t look at you. They may light a cigarette. That’s called a tell. Any sort of involuntary,

nonverbal cue, or verbal, even, that lets you know what they’re doing.

So the primary rule of tells is, weak is strong and strong is weak. In poker, if a person is betting

aggressively, looking at you acting very strong, what they’re trying to do is get you out of the pot

because they’re weak. They want you to fold. The person who bets and kind of looks away and

starts whistling acting weak is generally strong to suck you into the pot. And you see this

premise all the time in everyday life.

If a person says, “I‘m going to sue you to high heaven,” pretty safe bet he doesn’t have an

attorney. And we all know about the guy who tells you he’s making money hand over fist in the

market. Pretty good chance a margin call is right around the corner for him. Strong is weak

because, generally, if we feel weak about something, we overcompensate by acting strong.

So, as far as the art of tells go, when you’re trying to learn about a prospect, a competitor, a

client, a co-worker, three things you need to understand. First of all, know the character.

Remember the story about Bill and Mr. Baker? People are very consistent. They have a

predictable pattern of behavior. If someone acts a certain way one time, they’re generally going

to act that way in the future. Secondly, know his or her motives. Do they have a reason to lie?

Prospects generally do. They want a better price. They want a better fee. Do they have a reason

to lie, is there a motive? Then lastly is actually tells. Body language, nonverbals, things like that.

When you combine all three, it allows you to get a better read on a person.

The answer to any situation in poker, in insurance, in dating, is always “it depends.” For all the

five-step processes and yes/no, black and white, rarely is the answer to any question set. It’s

based on the circumstance. So Mike Caro, who wrote a book specifically on tells in poker, say

weak is strong and strong is weak. But Maya Angelou said, “When someone tells you who they

are, believe them.” Totally dissenting views, right? Well, whom do you believe? It depends. If

someone acts strong, does that mean weak? If someone acts strong, does that mean strong?

Another one of my favorite movies is a movie called “Swingers” with John Favreau and Vince

Vaughn. Two actors in their 20s, broke, decide to go to Vegas for the night. And they put on

suits, and they’re trying to act the high roller part. And Mike brings his last $300 with him.

They’ve got this plan to go in and act cool and get comped. So they go in, and the first table he

goes up to, a blackjack, is $100 minimum. So, at this point, he needs to save face, he bets $100.

Firsthand, what does he get? Eleven. What does Trent say, “You’ve got 11, what do you do on

11? Double down. You always double down on 11. You always split aces and eights, right?”

Well, in this particular situation, for him to double down, that represents one-third of his life

savings. On the turn of a card. Well, what should he do? The answer to whether you double

down or not is, it depends. Yes, over time, mathematically your expected value is positive if you

double down, but in this particular case, do you really want to put another third of your life

savings on this card? Sure enough, he doubles down. This is Hollywood. Dealer makes 21, and

he loses.

But what you need to remember from that is there are no rules. When you’re in a situation, you

need to adapt and take that “it depends” philosophy.

The fundamental attribution error, the biggest flaw, I think, when reading a person is to look at

one variable. My friend Doc, who has been playing poker for 25 years, graduated from Harvard

Medical School. The worst poker player I’ve ever met. My friends and I send a limousine to

bring him to the game, but that doesn’t make sense. He went to Harvard; he’s a doctor. His

experience, shouldn’t he be good in poker? No. People want to think that one attribute transfers

to another. It doesn’t always work that way.

Bill Gates, during the comDesk convention in Las Vegas, was spotted playing $6 and $12 limit

Texas hold ’em at the Mirage. Based on that one bit of information, you would think that Bill

Gates isn’t very rich. He was also losing. Based on that one piece of information, you would

think Bill Gates isn’t very smart. Would that be a good read on Bill Gates? Poor and dumb.

Probably not. But we always want to look at one thing and think that transfers. The person who

can’t look you in the eye. Well you’ve studied tells, you’ve studied buy-or-sells. A person who

can’t look me in the eye must be lying. Well, then you go home and you look in the mirror and

you realize the last time you blew your nose, you missed a little something. That could be the

reason why they couldn’t look you in the eye. Not because they were lying.

Very relevant to our last speaker is processing multiple variables. You watch CNBC, you’re

going to have five experts giving you the reason why the stock market is going up or pick their

stock is going up. Another expert giving you five reasons why it’s going down. All these

variables when you’re looking at especially the stock market. Fundamental analysis, technical

analysis, the economy, the political. Which one determines whether the market goes up? All of

them. Dinkin’s law of variables. For every expert opinion, there’s a dissenting expert opinion.

The best decision-makers can take everything in.

What the heck is an FTE? I was working with this other group to give a speech. This woman

kept saying, I’ve got 90 FTEs and 60 in San Diego. I had no idea what she was talking about. I

thought she meant fried tomatoes in eggplant. She actually meant full time employees, but I

didn’t know because we get so caught up in our own industries, and especially in insurance.

From the welcome event from last night, I’ve been listening to some of these conversations and

had no idea what you people were saying — 401, 612b. We get so caught up in our own

language that we don’t walk in the shoes of other people to try to understand from their

perspective. And we think, rather than saying, I’m telling you something, you need to get it. The

approach should be: How can I present the information so that you do get it?

My high school basketball coach, the best advice he ever gave me was because I was very fancy.

You want a no-look and behind-the-back. If you throw a no-look pass and your teammate isn’t

looking and drops it, whose fault is that? And what he told me is a good pass is one that’s

received. And as a writer, if I write something, and someone doesn’t understand it, you want to

just say: You don’t get it. What’s your problem? The problem is in the messenger. A good pass

is one that’s received. When you’re communicating, we get so hung up on our own presentation

in what we want to say, we don’t stop to say: Hey, is this person getting what we’re saying? It

comes back to the old adage, the customer is never wrong.

Mirror and matching. This, to me, is like Jedi mind stuff in terms of mirroring and matching.

You see a couple in bar, you say they’re vibing each other. You see people getting along, what is

that? Well, when people are actually getting along and have chemistry, you hear that term, their

movements and their body language everything actually starts to mirror each other.

Well, in a sales situation, in a business situation, you can actually create that vibe by mirroring

another person’s behavior. In fact, last night at dinner, I had the pleasure of sitting next to Bill

Irvin. I made fun of him the whole night. It was great. He makes fun of people, I made fun of

him. Did I just say his name wrong? Dale Irvin. So much for that joke. He’ll get me for it.

He makes fun of people. I made fun of him. I wrote a book with Amarillo Slim, a great cowboy.

For a year, I just spoke in cowboy talk. Let me tell you, I’m closer to that boy than 19 is to 20.

And we developed a comfort level because we mirrored each other’s behavior. He spoke in a

certain way, a certain set of language, and by mirroring that we developed this close relationship.

He’s going to get me for that, Dale, huh?

In a sales situation. No means “no” in New York. In LA, “yes” means “no.” Oh, I love your

screenplay, it’s great. That means you’re not getting a return phone call. And I find even in

business, if I’m dealing with people in New York, right to the point. They don’t want to mess

around. If I’m dealing with people in the Midwest — I realize I’m generalizing because I do take

an “it depends” approach — but, generally speaking, I’ll speak slower, I’ll develop more rapport.

The vocabulary and acronyms, we’ve talked about that. A case of what? Insurance people use the

word “case.” Case of beer? Case of peanuts? We think our language is everybody else’s, but

walk in the other person’s shoes.

And then in terms of visuals or charts, emotion and feelings. In sales, you’ve heard, what do you

call it, buyer styles or personality types. Whatever your personality type is or your buyer style is,

you will sell most effectively to a person with a similar buying style. So if you’re highly

analytical and into charts and graphs and your prospect is the same way, you will probably sell

that person. The problem is, if you’re very emotional and that’s how you sell, and they’re

analytical, that’s where you have a problem.

Well, at some level, you’ve got to stick with what works for you. The other side of it is walk in

their shoes, and find out how they need to be sold and how they need to be talked to. Because if

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