A Poker Lesson

I just finished reading The Biggest Bluff by Psychologist (and poker player) Maria Konnikova, which explores the relationship between skill and luck in poker; but really is about decision making and human behavior generally. Konnikova’s research while a doctoral student touched on how people respond when placed in uncertain situations with incomplete information. This is what led her to poker. I flagged this passage early in the book, which is about a game-theory experiment she conducted as part of her doctoral work well before she started playing poker:

“… the illusion of control is what prevented real control over the game from emerging—and before long, the quality of people’s decisions deteriorated. They did what worked in the past, or what they had decided would work—and failed to grasp that the circumstances had shifted so that a previously successful strategy was no longer so. People failed to see what the world was telling them when that message wasn’t one they wanted to hear. They liked being the rulers of their environment. When the environment knew more than they did—well, that was no good at all. Here was the cruel truth: we humans too often think ourselves in firm control when we are really playing by the rules of chance.”

I’m not convinced we are playing entirely by chance right now as related to COVID-19 and real estate, but I’m pretty sure many of us have fallen into the above trap: we are holding onto what we think should happen based on prior circumstances (which are now at least partially irrelevant) and our decision making process is deteriorating because of such. I am seeing a lot of this from both tenants and landlords in our work at Graffito. But I am also starting to see a select group of organizations pivoting away from past business models and transactional norms, which oddly gives me great comfort. And it is one reason why, despite still being in the early stages of this pandemic with some serious challenges ahead, I think we are going to see more retail deals and new retail-touching collaborations/partnerships happening in September/October than we’ve seen in the past six months.

Also, I liked the book and it’s an entertaining read — it’s like a combo of Moneyball (book), Thinking, Fast and Slow (book), and Rounders (movie).

Excerpt Above From
The Biggest Bluff
Maria Konnikova