An economist's guide to acing the Diwali card party

Top tip: Think of each hand and each play as independent of what's happened in the games before. (Illustration by Suneesh K.)

In the list of things to do on (or ahead of) Diwali, wagering on card games features high for many of us. Like everything else, it’s a matter of tradition, an annual attraction without which Diwali parties are incomplete.

Teenpatti, rummy, and poker are the traditional trio of these parties. And as it turns out, it's even auspicious to gamble on the day.

This Diwali, here’s a guide to help you keep that money, and win some more. No tips here, just some age-old principles from psychology, statistics, and veteran poker players.

Are you expecting value?

Rummy and poker are unique games of skill, but luck also has a big role to play. Amit Varma, a professional poker player and writer, puts it best in his column: “poker is a unique game in the sense that it inhabits a twilight zone between sport and gambling”.

A part of the skill is the ability to frame judgement based on the expected values of a move. It's based on a simple formula. Multiply the chance of winning with the money to gain. Multiply the chance of losing with the money you’ll end up losing. Find the difference between the two numbers and you’ll get an expected value. If this value is positive, you’ve played it right.

Knowing the probability or chance of a hand being a winning hand, however, needs work. This figure is more easily available on an equity calculator. The math can be overwhelming for a fun night but comes in handy if you are playing an online game.

The central idea that probability has to offer is that gains are made in the long run, by playing multiple games. A player may make the right moves and still lose. But in the long run, if one keeps making those right moves, without worrying about the outcomes, wins will follow. It helps to remember, luck impacts a game in the short run, but skill wins games in the long run. A solid principle to get behind is, to take the cards you are dealt and keep doing your best.

Beware of fallacy trapdoors

With all gambles, there are few things to know about winning, and more on how not to lose. And in that long night, full of dopamine rushes, knowing how not to lose is going to matter.

Say, you have lost all hands you got to play. Not one peeped success. “Surely, probability, coin tossing and all that means, success will have to happen, eventually," you think. “I am long due”, you think again, and act on it to place that confident bet. But guess what? It wasn’t the right move to make. You fell prey to the gambler’s fallacy. Each event is independent, and a losing streak does not imply a possible predictable win is looming around, like anticipating the intermission due in a movie.

Then again you may find yourself in a different situation. “I’m on a streak, I haven’t lost a single hand,” your mind says. “I’m not throwing away my shot,” and like a basketball player, who has converted all the shots she took, you think you’re on a roll. Your heart races, a thousand dopamine needles inject into your brain, and you bet big, alas! That’s the hot-hand fallacy that hit you. Thinking you are on a roll, winning hands you had no business winning, betting big, really big, only to lose.

And sometime during the night, the tougher third in the bias trinity visits your mind. You’ve made bets, raised them, considered them, and raised them again. Surely, you can’t fold now, as the next round comes to you? You think, “Don’t back down now, stand tall and face it all”. You stop yourself from folding, even though your intuition tells you to quit. That’s the sunk cost fallacy. To think being stubborn, and resolute is the noble thing to do, is wrong. When your mind sees the value your cards have is low, you’ve got to get out. It's a mental battle to fight, knowing when to fold is a tough skill but to stay in to think you’re in too deep now, is a fallacy trap.

The way out is to think of each hand and each play, independent of prior events. To play each on its merit, can help beat the biases. But knowing the biases is one thing, practicing to avoid them is another. Experienced card players have to work hard to beat their minds, and to remind themselves how fabricating it can be.

To bluff, or not to bluff

A person who claims they can tell a bluff in a card game is most likely bluffing, and you should be able to tell. But to be able to bluff is a central part of the game. There are big payoffs if you can call it too.

Michael Slepian, Professor at Columbia University, has been able to find some promising answers that can guide one to knowing how to tell.

Turns out, it's not on the face, recounts Maria Konnikova, a former World Series of Poker winner, referring to the Professor’s study in her book, The Biggest Bluff. The tell is in the hand movements. To know if a hand of cards is strong or weak, check how fluid the movements of the executing hand are.

Judging players, their risk-taking abilities, and how confident they are about their moves, is less on the face. Preconceived notions from reading a player’s personality may mislead too. The other thing to remember is – you don’t need to always bluff to win.

Keep that cheat sheet handy

Poker and rummy are complex games. Knowing what hands to make and the chances of it being a winning hand can help set the rhythm for the rest of the evening. Quick sheets can guide you on hands to aim for and fast refreshers to any rules you need before you get your mojo working.

As legend has it, goddess Parvati aced lord Shiva and all others when it came to gambling. Of all her divine powers, she was likely great at thinking with probability, perceptive at calling bluffs and knew how to get the better of her biases!