My Conversation with Annie Duke

Here is the transcript and audio, here is the opening summary:

Annie joined Tyler to explore how payoffs aren’t always monetary, the benefits and costs of probabilistic thinking, the “magical thinking” behind why people buy fire insurance but usually don’t get prenups, the psychology behind betting on shark migrations, how her most famous linguistics paper took on Steven Pinker, how public policy would change if only the top 500 poker players voted, why she wasn’t surprised to lose Celebrity Apprentice to Joan Rivers, whether Trump has a tell, the number one trait of top poker players, and more.

Here is one bit from Annie:

DUKE: So when I went on my first date with my husband, my brother and brother-in-law immediately decided to make a market, and it was whether we were going to get married. Now to be fair, my husband and I — before we went on our first date, we’d been friends. Both my brother and my brother-in-law knew my eventual husband, but this is when we’re going on our first date. They make a market. I think that my brother-in-law ended up bidding 23.

My brother then called me up, cracking up, that my brother-in-law had bid 23 when we hadn’t been on a first date yet. And I then started laughing at my brother, said, “Well, that means you had to bid 22. Why are you laughing at him? You somehow bid 22. It’s our first date.” Now, that’s because we’re all people who sort of think this way. And so this sort of becomes the fun of the friendship, but there are other people . . .

And this from Annie:

DUKE: My suspicion is that if only the top 500 poker players voted, people would be thinking a lot more about edge cases — where things could go wrong, for sure, because poker players just are obsessed with that. I think that there would be more long-termism as opposed to short-termism, again, because you have to be obsessed with that as a concept. I think that people would be thinking about “What are the unintended consequences? How does this look?”

Another thing that’s really important that poker players think about is, “If I put this policy in that looks like it’s awesome, how can someone come in and find the cracks in it so that it can turn into something bad?” I feel like the top 500 players would definitely be thinking in that way more.

You will have to read or hear the dialogue to take in my many good questions.


'to explore how payoffs aren’t always monetary'

Family counts too. "Duke was also the Commissioner of the Epic Poker League. She cashed a fat check from this organization. All while it piled up millions in debt and ultimately filed for bankruptcy. In the end, Epic cancelled the final two tournaments of its first season. Of course, this included the League Championship $1 million freeroll promised to the top money winners. Duke still got hers though.

Of course, most members of the poker community are also keenly aware Duke is the sister of Full Tilt Poker founder and board member Howard Lederer. Full Tilt was booted out of the American market by the United States Department of Justice in April 2011.

Principles in the organization were charged with various money laundering and gambling law violations. Later that year, Lederer and other members of the Full Tilt Poker board were accused of defrauding poker players. Full Tilt was referred to as a Ponzi scheme. Apparently the company’s owners regularly raided player funds to pad their own pockets.

The DOJ accused Lederer of personally taking over $40 million in player funds for himself. In 2012, PokerStars bought out Fill Tilt Poker and settled the case with the DOJ. PokerStars was the one that paid back $150 million to players, not Full Tilt or its owners. Lederer also settled with the DOJ, admitting no wrongdoing and giving up assets worth a paltry $2.5 million."

Interesting story. I can see your finger, but not your point.

It's deranged prior's usual feeble attempt to discredit TC.

Wouldn't he have mocked this instead - "to take in my many good questions"? Because that is the sort of MR satire gold which represents the sort of payoff that is priceless.

"make a market": Is that a phrase from a foreign language or is it an idiom unique to gamblers? When I was reading it I thought that they decided to open a 7-11. But that made no sense so I read it again and excluding that possibility it all made no sense. Did she mean "make a bet"? What?

In order to make a bet, you have to find someone else to take the other side of the bet.

And I'm guessing you're even happier if there are a lot of potential bettors, so people who want to bet with you face competition. So my guess is that they say "make a market" because that's literally what they're trying to do: find a bunch of people who will form the demand side of the market for your bet, so they can take the other side of the bet.

It's the rest of her quote that I find inscrutable. I don't know what she means by bidding 23.

This page certainly has all of the information and
facts I needed about this subject and didn't know
who to ask.

Looks like the siblings are long term partners in crime, basically.

Yes, I guess the top 500 poker players would be thinking long term, but for the public benefit? Seems unlikely. I'd guess a higher percentage of high functioning sociopaths in that group.

Sounds like Congress, but with brains.

Whining aside Tyler, that was a good and interesting interview. Very few people are actually commenting on the interview itself.

They are whining about what is not actually in the interview itself.

Haven’t watched it yet but hope there was a culture of Fairfax question about today being the first day of:

A marijuana decriminalization policy is officially in effect in Virginia as of Wednesday.

One month after Gov. Ralph Northam (D) signed the bill—which will make possession of up to one ounce of cannabis punishable by a $25 fine with no threat of jail time and no criminal record—the commonwealth has become the 27th state to enact the policy change.

Did they go far enough? Too far?

Kidding... but not kidding?

Don't forget reducing assaulting a police officer to a misdemeanor.

I wonder what they are thinking. That there are enough bureaucrats in Virginia to make it a giant CHAZ? A giant bluff?

Why in God's name bother with a trivial fine?

I don't care about poker, but did Tyler ask about her quite chequered past?

Quickly skimmed it, and no, it did not come up. For those who are curious, Annie Duke was involved in more than one company that ended up stealing money from its customers. I used to play online poker and followed this all as it happened, but it was ~10 years ago so my memory is imperfect, but my recollection is that her hands were not clean.

I'm aware that Duke isn't popular among poker players, which I am not; indeed, I never heard of Annie Duke until Cowen's post that he would interview her and I Googled her name and learned her background. Why would Cowen interview a poker player? I assume it's because many of the skills of an accomplished poker player, or accomplished chess player, are the skills of the accomplished business person (i.e., investor). Now consider this: many gamblers get caught cheating for the same reason many investors get caught cheating.


I'm a long-time listener, and occasional poster here on the comments. I just wanted to say how disappointed I was to see you feature Ms Duke, given her long history of very dubious business activities in the past. She played a key role in trying to cover up fraud, and her hostility to the mathematics and facts - rather than an open mind - caused her to actively defend thieves.

It is fair to say that the gambling industry is looked down upon, by the rest of society. So to host someone like Duke who is looked down upon BY THE GAMBLING INDUSTRY for her association with *multiple* frauds is a step below what I have seen of you in the past.

Tyler - I continue to be impressed and respect you in every way, but feel very disappointed that you gave an alleged fraudster like Duke a promotional channel here.

Didn't Phil Ivey get convicted of fraud in a UK private lawsuit as well? And two words for you: chess poker.

No - he lost a pair of civil suits (one in NJ, one in UK) but I do not think he was convicted of anything in any criminal courts in connection to this. Indeed, I think the regulators allowed the casinos to litigate privately, rather than have the regulator take any criminal action.

I have heard rumours that he might have allegedly possibly been charged with underage play in a casino at Atlantic City many years ago, under the name "Jerome".

Times must be tough for Tyler if he’s reduced to interviewing a former reality show contestant.

Maybe this is a blip and not a sign that the real intellectuals are afraid to be associated with him because he’s insufficiently leftist. Perhaps a few more disclaimers in blog posts that prove his loyalty to the cause will help when the cancel mob comes for him.

I'm a lawyer who advises clients in business, which means I help them mitigate risk. It's all about risk. Some poker players and investors cheat as a way of mitigating risk (in the game or investment, not the legal risk). You know the gilded age tycoon who famously said to his lawyer: don't tell me what I can't do, tell me how to do what I want to do. I'm fascinated by the famous investor today who from time to time behaves in public like he's barking at the moon crazy. Some of the things he says in public might be interpreted as an effort to manipulate stock prices, but because he is who he is (both a highly successful investor and barking at the moon crazy), few would even consider that he cheats. Does he behave as though he is barking at the moon crazy in order to mitigate risk?

A 55 billion dollar comp package only seems barking mad until you get it.

What makes a successful gambler is the same skill as what makes a successful investor: mitigating risk. For the investor one might consider puts and calls, and for the gambler one might consider whether to hold or fold. An aside, I don't know whether chess and poker are comparable games of chance (gambling), but both require extraordinary skills at predicting the behavior of others. Which is also true for the successful investor; indeed, investing has become a data-driven exercise (using massive amounts of computer power) in predicting the behavior of other investors. Is it possible for chess and poker to become data-driven, with players watches or eye glasses connected to massive amounts of computer power?

My memory is that poker is far more fun (for me). But it's decades since I played. You know what they say - quit when you're ahead.

Lol I think Tyler didn’t like Annie or didn’t think she did well in the interview. No positive comments from him on the interview, he just includes the podcast summary. Then at the end he says listen to hear his great questions.


"If I put this policy in that looks like it’s awesome, how can someone come in and find the cracks in it so that it can turn into something bad?"

Maybe because it was so hard fraught ACA has turned out to be almost impervious. On the other hand, trade policy has turned out to be quite vulnerable to executive sabotage.

It wasn't even self-recommending.

Not a fan of the guest, but an excellent choice of Nirvana song from Tyler. Incesticide is underrated.

If economists were banned from talking to crooks wouldn't they become rather circumscribed in their professional activities?

If Tyler had the opportunity to interview the Golden State Killer he would probably get less hate. As long-time listeners, we must remember the ol "this is the conversation I want to have . . . " we have no place to be disappointed. He owes us nothing and it's a free podcast.

+1, and I did interview a convicted killer once and hardly anyone complained. Model that.

This kind of stood out though. "I bet that rings a little hollow to the family of the man he killed." prompting this "Yeah, and what was his name again? Not sure if Tyler got to that, or spoke to his family."

This isn't exactly a feminine loving crowd here (I'm not referring to our hosts), even the idea of an accomplished female poker player is offensive. If an accomplished female economist gets little respect, why would an accomplished female poker player. Consider Elizabeth Holmes, whose fall from her pedestal in Silicon Valley wasn't far because the pedestal was so short. Female fraudsters in whatever activities don't receive near the respect as male fraudsters (whom people just don't understand their genius). My other comments were meant to compare gamblers and investors. Female gamblers and investors are treated pretty much the same: they get very little respect.

Not sure. They don't think you'll kill, but they think you "might" be lying about something, somewhere. I'd hold off on that Bloomberg column about "5 Hot Poker Investments you can't afford to pass", for at least a week.

>I did interview a convicted killer once and hardly anyone complained.

Actually, you were mocked relentlessly.

I don't know the Golden State Killer, nor any of his victims. I do, however, know many victims of Annie Duke.

While I wasn't a direct victim, she falsely accused me of lying - despite the fact that I just did the maths. The intellectual rigour of that woman is very very poor, which is probably the only way she can sleep at night.

Economics and crime go together. No, I don't mean that economists are criminals, what I mean is that economists study human behavior and how incentives, or disincentives, affect that behavior, including criminal behavior. I've commented before that I worked for my state legislature back when mandatory minimum sentences were considered the solution to crime: the longer the sentence, the greater the disincentive to commit the crime. It turned out, based on later research, that the severity of the punishment wasn't the deterrent, but rather the probability of being caught and the speed with which the punishment is imposed. Thus, we got a massive increase in police budgets and police presence on the streets (which produced its own problems). Gamblers cheat, investors cheat, criminals commit crimes based on the disincentives: the probability of being caught and the speed with which punishment is imposed. Some believe that the disincentives for committing financial fraud aren't sufficient to deter financial fraud, especially when considering the potential rewards of the fraud. As for murder, that's typically a crime of passion, whereas financial fraud is a crime of greed. Greed is good, right?

Annie got tutored in poker by her brother, and got a ton publicity as a woman. Her success is endorsement deals and reality shows. She hasn't played tournaments for nine years. Was she even a winning player?

Doyle Brunson ran Monte Carlo simulations by hand in the 1950's, and still plays competitively. He ran the mile in 4:43 when the Texas high school record was 4:41, and had an offer from the Minneapolis Lakers.

Other poker players have Ph.D.'s. What about the AI researchers at Alberta or Carnegie Mellon?

It wasn't a conversation about her Poker play. So, that's largely irrelevant.

Haven't listened yet, but if it wasn't about her poker play what's the interest in having her as a guest?

She talks a lot about how people play poker and things related to poker, the group dynamics, the psychology, but she doesn't really talk about what she did very much.

The fact that Tyler Cowen thinks Vermont is more beautiful than New Hampshire perfectly encapsulates every disagreement I have with his opinions.

On prenups, could it simply be that they cost $2,500? Fire insurance (what is that exactly, homeowners?) is less than that.

"Well, that means you had to bid 22. Why are you laughing at him? You somehow bid 22."

In those kind of bidding options, it's good gaming to bid someone up higher than you would go, assuming you can determine that they believe the bid should be higher and they aren't suckering you.

If you believe the correct bid to be say 10 and you stop there they get it for 11. But if you are confident they'll keep raising, it's smarter for you to push the bid up to get them to commit more resources. So, maybe he thought the bid was worth 10, but pushed the brother in law to 23.

Can someone explain to me the mechanics of how this bet works? What does it mean to bid 23? How does it actually pay out if they do/don't get married?

"But that’s not the rules of the game. It’s Celebrity Apprentice. Donald Trump picks. He’s been friends with Joan Rivers forever, and she’s more famous than me. I literally have no shot."

So that is what America has become: a rigged reality show where the unwashed masses have nothing to expect but a boot stamping its face... forever.

Cheer up, in a few months, we'll likely get a change. From the Right boot to the Left boot! ;)

Given the number of top poker players with addictions to gambling or drugs, not clear that their discount rates are necessarily superior to the general population of voters. My experience on message boards is that top poker players have as many dumb economic and political views as the general population.

I was a winning player and part of the online poker community prior to Black Friday. <10% of online players were winners.

She often says some things at odds with conventional wisdom amongst top online players.

She said for poker to be fun, by definition, it must be for an amount that matters to the player. All successful online players I know do not play with more than 2% of their poker bankroll at a single table. (Poker Bankroll != real life bankroll) Mind you in the online days we were playing 10-24 tables concurrently. I would not move up in stakes until I had 70 Buy-In's at the next level. I did not beat the game until I implemented this (bankroll management). Some of my friends whom were better than me got to a point even though they were playing with 2% of their rolls they could not disconnect themselve from the $'s they were playing with, and they made poor decisions. Thus the stakes they could play had a ceiling (at least at that point in his life for the $'s he was playing with). At the time his poker bankroll was basically his real life bankroll (we were undergrads).

I don't think you can win consistently over time unless you can completely disconnect yourselve from the $'s and losing 4 buy-ins (think a ~2sigma event) does not cause you to lose any sleep or impact you psychologically. You will blow up if you are playing with 10% of a bankroll you actually care about.

Have tuned into various conversations with her in the past and she lost credibility in my view on some technical poker things she says.

That is not to say she isn't a very talented poker player and a great writer.

Conventional poker wisdom says, to win, you have to be playing for an amount you do not care about at least in the downside (this is not necessarily true in tournaments for the upside)

Thanks for putting out the excellent forecast. I have a comment about her wonkish answer...
That nouns are learned first and then verbs to learn a "particular language"
But natural language wise you think about verbs and then nouns I think she said. So if you were to invent a language in your mind, you'll first invent a verb and then a noun.
Such a fascinating idea, I wonder what explanation there would be for its reason.

*Forecast*, sorry podcast. I blame auto correct.

Why do so many people whitewash Annie Duke's tarnished past? I don't get it. Are you not aware of it?

If you talked to "the top 500 poker players," they would mostly tell you to stay away from Annie Duke.

Why do so many people whitewash Annie Duke's tarnished past? I don't get it. Are you not aware of it?

If you talked to "the top 500 poker players," they would mostly tell you to stay away from Annie Duke.

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