Poker Teaches

>> ALLEN: Hi everybody. I'm sorry we didn't get a larger room. We really didn't know that we'd have such a great crowd. But, thank you very much for coming. I'm Peter Allen and I'm the director of Google University and I'm honored to invite today--introduce Charles Nesson, a professor at Harvard Law School, the founder of the Berkman Center for Internet and Society, which focuses on the legal study of cyberspace, has many great legal credentials which I'm going to skip over. I will mention that he's a graduate of both Harvard College and a summa *** laude graduate of Harvard Law School, where he's been a member of the faculty since 1966. He is also a founder of the Global Poker Strategic Thinking Society which focuses on developing an academic curriculum that uses poker as a teaching tool. Charlie has been an active player in some of the most high stakes episodes in recent legal history. Among his many accomplishments, he hit the jackpot litigating the case White v. Crook which made race and gender-based jury selection in Alabama unconstitutional, and defending Daniel Ellsberg in the Pentagon Papers case. I'm as happy to welcome him here as if I drew an ace high flush on the river, Charles Nesson, Andrew Woods, Poker Teaches. >> NESSON: Thank you very much Peter. So, I'm a child of the 60s who smoked too much grass back then and really never stopped and--I got into this poker stuff on a sabbatical at one point, in 1980, when I ordered an IBM PC and waited for it to be delivered and I had learned Pascal thinking that I would do some programming. And when it came, of course, it didn't have Pascal. That turned out to be vaporware. But, it did come with Basic and I wound up programming five-card draw jacks or better poker in basic. And found myself fascinated with the bluffing algorithm. It's like my major in math in college was mathematics and I'd had the experience of programming on UNIVAC I when I was an undergraduate, and then to be able to actually write a program that played reasonable five-card draw jacks or better was just an amazing thing to me. I get into the internet really 1994 in my law class, I teach a class called Evidence, which is like an amphitheater, Harvard Law School class about how you proved the truth in court, and was blessed with a small grant that let me get a bunch of computers into the classroom. I rented 20 Quadra machines and formed my students into groups of eight and had them work on these machines to do projects and--then we brought them into the classroom and actually networked them all together and it was--it was our first learning network experience. And the idea of combining an interest in poker which to me is like a fascination as game theory, a strategic game, Poker is the quintessential strategic game. And if you--if you're into thinking of games as languages for, perhaps, more complicated things, that is simplifies forms that allow you to think about more complicated subjects, Poker as a strategic game is just surpassingly eloquent. I want to introduce you to Andrew. I met Andrew at a poker tournament held at Harvard Law School. It was a charity tournament done for the benefit of our public service auction in which hundred plus students and faculty all put up 20 bucks, played the tournament through to a conclusion one winner no financial prize, all money going to charity. And Andrew was the son of a *** who put me out of the tournament. And we got started on this Global Poker Strategic Thinking Society, which I'm going to ask him to tell you about, the next year when we weren't allow to do that tournament because our general council told us it was illegal. And I got pissed. And the result of that is we have in a sense started an enterprise, one of the objectives--one of the objectives of which is to legitimate poker as a genuine educational enterprise. For me, I see it as the basis of the distance, the scalable distance education environment that I in the Berkman Center hope to lead Harvard into. Poker to me is just the most wonderful way to engage young minds and expands people's thoughts. So, here I want to ask Andrew, Andrew come forward and tell us about GPSTS. >> WOODS: Well... >> NESSON: Oh, you got a mic, good. >> WOODS: The first thing I have to say is it--it's just as well that they cancelled the poker tournament. I think it's ashamed they told us it was illegal. But, in the tournament where I met Professor Nesson, I had no idea he was a professor, I thought he was just some crazy old guy sitting across from me at a poker table. And there came a place where he had pushed all in and I had a better hand. And I asked him, I said, you know, and he said, "I'm a professor." And I said, "What do you teach?" He said, "I teach Evidence." So, I said, "Well, I'm going to teach--I'm going to take Evidence next year." And I said, "If I put you out of this tournament, if I beat you, will you give me an A in your class?" And he said sure. [INDISTINCT] >> NESSON: Oh, I did? >> WOODS: Oh believe me, because I made sure to take your class. He gave me a B+, so, I was a little frustrated by that. Yes, unbelievable, right? >> Oral contract. >> WOODS: So, after that, I took the opportunity to have dinner with Professor Nesson with a couple of other students and we started talking poker, mostly because I was upset that I hadn't gotten my A. And when we were talking about poker, we started talking about the number of students that we knew at Harvard Law School, that we'd run into--would play poker quite seriously, who'd played a lot of poker, and then, who had gone on and left the poker [INDISTINCT] gone on to law school. And had an--been incredibly successful at the law school and in that experience. And what we came to realize is that there's this incredible parallel between the type of thinking that allows you to succeed at poker and the type of thinking that allows you to succeed in the law school environment, and by proxy the legal environment. And we started talking about what those skills were. And Professor Nesson came up with the idea of, why don't we get together some great poker players and let's get together some great academics and some very intelligent people and put them in a room. And so, in April 24th, I believed it was, of this year, we convene a meeting at Harvard Law School and we had Howard Lederer, and Annie Duke, and Andy Bloch in attendance to represent the professional poker players. We had the executive director, at that time, of the Poker Players Alliance there. We had the head of Harvard's Division on Addictions. We had--a very important consideration. >> NESSON: Yeah, you bet. >> WOODS: We had a signaling expert from MIT there, to discuss the ways in which the human face can give away information. And we convened these people among--with an artificial intelligence program and some other individuals to study poker. And after a daylong session, what we came out of it was that, there's this incredible need and this incredible thirst to investigate this very useful and very interesting game. From that conference was born this idea of, why don't we get together students all over the place and give them an opportunity to learn from this, to study the game, to have some fun talking about it and exploring the various ways. And I said, "Great professor. We'll start poker clubs everywhere." And he said, "Great." He's like, "But they shouldn't be poker clubs because poker's only a tool. It's like a carpenter with a hammer. You don't call it 'hammery', you call it carpentry. And so, we should call it something else than a poker club. We should call it a Poker Thinking Club. It's about thinking and--but it's strategic, it's a strategic game." So I said, "Okay, the Poker Strategic Thinking Club." He said, "No, no, no. It's a society." I said, "A society? Oh, okay, whatever." And he said, "But it's--we're everywhere. This poker thing, it cuts across all boundaries of race, and religion, and nationalism, and every one loves it, and gender. People love to play poker. It should be global, the Global Poker Strategic Thinking Society." I said, "That's a horrible name." And he said, "Well, I already ordered the stationery, so we're stuck with that." So, we have this great concise name, the Global Poker Strategic Thinking Society, which I think focuses exactly on what we're doing. And the goals of our organization are these; we have four basic tenets. The first one is to start and encourage the development of clubs and chapters at universities around the country and around the world. We've had an extraordinary amount of interest. We launched on August 22nd in Singapore. Since then, we've either have registered a student group, we're developing 18 to 20 groups around the country, another 4 or 5 in Singapore, and in Iceland, in the UK. We've had interest everywhere. And we're continuing to develop that. We're developing a speaker series, an educational curriculum, bringing in speakers to talk about issues surrounding poker, to talk about how poker communicates life skills. We had Howard Lederer come to Harvard and talk. We're sponsoring Annie Duke at UCLA on Friday [INDISTINCT] I guess that's tomorrow. She's talking about gender roles and psychology. We had Mike Sexton in to talk, and Jim McManus, an author, all talking about the ways in which poker communicates skill that have allowed them to succeed in a poker table, but also communicate skills that allow you to succeed in the larger world. We've also convened conferences, we had an academic conference last year and we're going to do another one in the Spring, probably here at Stanford. And the idea being that let's call some academic attention to these games. And the fourth thing we're doing is just providing students a place to have some fun, play in amateur poker exhibitions, playing games where schools take on schools. Harvard played Yale last week, UCLA is playing USC tomorrow. Next year we'll have Stanford playing Cal in their version of the big game. And the idea being that these games are fun and is a great opportunity for people to explore the types of strategic thought that are in poker, while being able to have some fun and engage in a game that can really engage students in learning and continuing to develop types of thinking. So, that's basically what the GPSTS has done so far and kind of where we're moving going forward. >> NESSON: But let me focus on the thinking part. In my class to my students, I don't start with poker. I start with the idea of what truth is in a rhetorical environment, how two-sided it is, how there's always two-sides to a story, and how important it is in trying to persuade someone else that you're capable of seeing their story from their point of view and articulating that to them so that they understand that you understand their problem. It's only at that point that they start listening to you. Before that they're just tuning you out. And I use poker as a way of focusing this thought of seeing from another's point of view. But first I start with a riddle that I would love to give to you and see how you do with it. So, here's the riddle; once upon a time, a queen lived in a kingdom that she ruled with an iron hand. You are supposed to laugh when the queen lives in the kingdom. She had a son that she wanted to marry the most intelligent, perceptive, woman in the kingdom. So, she gathered all the eligible women together and gave them the Law School Aptitude Test. >> WOODS: [INDISTINCT] lawyers. >> NESSON: And three of them scored perfectly. So, she had to choose from amongst these three. She brought them to the palace and sat them around a round table and gave them the following instructions, "I'm about to blindfold you. Once you're blind folded, I'm going to put a hat on your head, a small little hat, so that you won't be able to see the hat on your own head, but when you open your eyes with the blindfolds off, you will see the hats on the heads of the other two. Now here's what you must do, when the blindfold is taken off, I'm telling you in advance, I am going to place on your hat--your head either a red hat or a white hat. When your blindfold is taken off, if you see one or two red hats, you're to raise your hand." All right, now do we understand the set-up? The blindfold is going to come off, I'm not going to be able to know what colors the head--on my hat, it's either red or white. If I see one red hat, I raise my hand or if I see two red hats I raise my hand. And the queen says, "The first of you that can tell me the color of the hat on your head, take your hand down and stand up and marry my son, explain why." She then put red hats on each of the three. And then took off the blindfolds and immediately, of course, seeing two red hats each. Each of them raised their hand. And they sat at the table looking at each other for five seconds, ten seconds, fifteen seconds, and then one young woman took down her hand, stood up and said. "I have a red hat on my head," and she explained why. How did she know? Put your hands up when you get the riddle, I just want to just see how fast it happens here. So, let me say about poker, as you're letting this noodle in your heads, the point in poker where you become a poker player is the point at which you look up from you own hand. When people start learning poker, their first pre-occupation is their own cards. Is it--if I got a straight or a flush, or does two pair beat up one pair, what is the--all these things. They look--they're like this. The point at which you start to play poker is the point at which you are more interested in what is happening around you. You've got time, wait, you can look at your hand just about anytime. That point where you start to look and see what's happening in the environment and as the game unfolds, you start to see how the others at the table are seeing you, that's when the poker game really starts. So, how many hands up with the red hats? Who's going to explain it to us? Stand up over here, loud and clear. >> Come on. It's kind of... >> [INDISTINCT] >> [INDISTINCT] sitting down. It's--each of them have to--each of them have to assume that the other ones are perfect logicians. Also, if there's only one red hat then one person will have their hand down, and two persons--people will have their hand up and they'll be able to figure it out. I know if there's two... >> NESSON: If there was only one red hat, one person would have their hand down... >> If--it's the... >> NESSON: ...and two people would have their hands up because two people would see the one red hat. >> Right. Right. >> NESSON: And that's not the case with these three people. >> So that's not--so... >> NESSON: So we know there's not one red hat, but of course I knew that, I'm looking at two red hats right there. >> Right. I have it in my head I can't give it--I know what's going on, it's kind of... >> NESSON: It's not--this is what my mother taught me as a young lawyer. >> But don't... >> NESSON: Oop, oop, oop. She said, Charlie, it's not what you think of going home in the cab that counts. >> Each one knows that the other ones will have figured it out too, and since the other ones haven't figure it out, they've gained information from the fact that the other people haven't figured it out. >> NESSON: Now you're talking, now you're talking. >> Right. >> NESSON: But who can talk better? Who can--go for it. >> I actually have a different solution. >> NESSON: [INDISTINCT] so they all see you. >> I have a different solution. All you have to do is say, for this test to be fair, we all have to have the same color of hat. And since I see red hats, mine's red too. >> NESSON: You're--you're--you're absolutely right, that's not the right answer. >> If she had a white hat, then other two participants would have figured that their hat are red because everybody--like everyone else sitting raised their hands. So, they're already seeing some red hat, and now if I have white hat and this guy's raising hand, that means they both are--they both are raising hands. And nobody's standing up, that means they are confused as well. See what I mean? >> NESSON: You've confused me. >> Okay, I repeat. >> WOODS: I think his point [INDISTINCT] >> If I had--if we three are playing. I have white hat, you two have red hats. And if we--all three are raising our hands, that means I'm sure he's seeing your hat, he's seeing your hat, but you both--you both are kind of--you both are not standing up, that means you are also confused that who--why you are not standing up. And since you are not standing up, that means I also have red hat because you are confused. >> NESSON: You got it? Did he explain it? >> Yeah. Kind of. >> No. >> NESSON: He did not. >> WOODS: Yeah. Absolutely he did. He explained it perfectly. >> NESSON: He missed a [INDISTINCT] he missed a [INDISTINCT] wait a second. One more, one more. Okay. Good. Give it [INDISTINCT] >> I think--I think there's a--there we go. I think there's a base assumption that all three people are approximately equivalently smart. And... >> NESSON: Yeah. they took the test. >> They took the test and they passed it. So, you can't assume that somebody has not figured it out. If they--if the facts are plain, then everybody would have figured it out, but that's not the case which means that, for example, if you are two are wearing red hats and I'm wearing a white hat, and you have raised your hand but you have not figured it out yet, right? That means that I--that you cannot possibly be wearing a white hat, right, because you're not wearing... >> NESSON: So you've got a white hat? >> No, no, right. Because you know--you know that you're not wearing a white hat, because if you were wearing a white hat, I wouldn't be raising my hand. Right? >> WOODS: You can raise your hand if you saw my hat. >> No, no... >> No, no, no. That's right. >> Right? >> That's right. >> NESSON: Pass the microphone [INDISTINCT] >> So, it--he pretty much nailed it except for the last part, which is if, if there were indeed two white hats, he would have seen two white hats since if I'm wearing a white hat and both of you are raising your hands, Andrew would see two white hats, and he would not have raised his hand. The fact that he's raised his hand and equivalently you have raised your hand, therefore, there's got to be, at least, two red. Does that make sense? >> NESSON: [INDISTINCT] I tell you, there are, at least, two red hats. >> Well, I know... >> NESSON: Everyone sees two red hats. [INDISTINCT] >> Well, I'm trying to prove that there aren't two whites, and if I can prove that then... >> it's already a given, I mean, you see two red hats. >> No, from the perspective of these guys... >> NESSON: [INDISTINCT] the two of them are not white. >> Well, from the perspective of the two of you. If you see two whites, you would not raise your hand, is that correct? >> We know they don't see two whites, [INDISTINCT] >> And--and you'd--right, and the only reason both of you are doing it is because there is an additional red that you see. >> WOODS: So, if I'm--let's say, I'm raising my hand right... >> NESSON: Wait a minute. Wait a minute. No hints. [INDISTINCT] >> WOODS: I just want to ask a question. >> NESSON: There's a guy back there, he knows, he knows. >> If I see a... >> NESSON: Wait a minute, you've had your shot. >> WOODS: It's very strict around here. >> So, there's only two possibilities, right? I either have a red hat or a white hat. So, if I have a white hat, this means that you will see a white hat and a red hat. And he will see a white hat and a red had also. So, which means that you must--you will figure out you have a red hat. >> NESSON: How? >> Because you would know that I have a white hat and you have a red because he'll see the red hat. But you also raised your hand, so he must have a red hat. >> WOODS: So, hypothetically you're describing... >> Right. >> WOODS: Charlie and I both have red hats on and you have a white hat on, is that correct? >> Right, right. Because there's only two possibilities, you have a white or a red, right? >> WOODS: So, in that case, then one of us would figure it out, is that what you're saying? >> That's right because you would know that--because you will see a red and a white. Ands therefore, since I raised my hand you must have a red. No, sorry, sorry. I'm confusing myself. >> WOODS: Red hat, red hat, white hat. >> Right. So you see a white and a red and--hold on. I had it just a second ago. I just--I just confused myself... >> NESSON: [INDISTINCT] here you are--here you are, you said, suppose you have a white hat on your head. >> Right. >> NESSON: And you see Andrew with his hand up. >> And your hand up. >> NESSON: And my hand is up. >> He will figure out... >> NESSON: And then you're thinking Andrew is just as smart as you. >> Right. >> NESSON: And there he's looking at you with the white hat on your head and me with my hand up. What am I seeing? I must be seeing the red hat... >> see red--that's right. >> NESSON: ...on his head. >> That's right. >> NESSON: If you have a white ones on yours. >> That's right. >> NESSON: And therefore, you don't have a white one on yours. >> That's right. That's right. >> What if [INDISTINCT] >> WOODS: They were beheaded. [INDISTINCT] to some extent though, what you've just describe is the step that poker players have to take in order to be successful. Is that what the point which he realized it, is what hat you're wearing is completely irrelevant, it only matters what your opponent sees. If they had seen a white hat on you and a red hat, then they would have figured it out and you would have lost already. The fact that they're confused means that you must be wearing--that everyone must be wearing a red hat. Because the rules of the game worked with everyone's hand in the air if all three are red or if there's two reds and a white. So, all the information you have is that you know there's at least two reds out there. If there was one more white hat then one of your opponents would have figured it out, and you would have already lost. So, in this case, it's a case of stop trying to figure out what you can't see, you know you can see two red hats. Start trying to figure out what your opponent must be seeing in order for them to act the way they are. This is the very same thing that happens in a poker game. What you have, the strength of your hand is only relevant in terms of the strength of your opponent's hands. Your position, whether you have a pair of aces in a poker hand and then it comes out that there's four cards to a flush and you don't have the fifth card to that flush, suddenly your aces aren't as strong as they were. In real world situations, in a case where you may think you starting in a strong position, or you may think that your position is strong because of the own merits that you assigned your hand, it's only worth as much as the opposing parties think it is. The flexibility of thought, and being able to see your own self from the perspective of others, be able to assess your position unemotionally and from a perspective that your opponent see it, is a key element in developing business skills, legal skills, litigation type skills, negotiation, all of those components in a personal relation, etcetera, etcetera. All of those components are based on the ability to understand how you're perceived and be able to understand what the other parties in any transaction are thinking. >> NESSON: So, let me say why I think that this should be exciting to Google. The part of this that's exciting to me is the prospect of poker as a driver for open education. That to me is a tremendous goal that's still in front of us. As a teacher I know that the key to scalability is solving the problem--it's like any good--any good trick, it's got two sleights. You have to put something out that's really engaging, and poker is certainly that. But you then also have to be able to aggregate response coming back to you from a mass audience in a way that allows you to respond to it and create the loop that is involved in a teacher sending out a stimulus message, stimulating a response and then the teacher responding to it. And so, working through the Berkman Center largely, we've been working to--really trying to figure out the distance education problem and working with tools to try and aggregate response coming back so that a teacher can actually deal with it. So, to me, poker has the following amazing quality; it's got huge appeal, it's a magnificent game, it's the quintessential strategic game. It's the first game--it's the game on which von Neumann focused when he wrote his original game theory papers. It's strategic--let's--let's get the taxonomy straight. There are games of chance; those are games that you cannot loose purposely. Those are games where there is nothing strategic on the other side. You're playing solitaire or you're playing roulette or playing something of that order. There can be some skill in a game of chance--in learning the best odds against whatever is offered to you. That's possible. There are some games of chance which have no skill whatsoever like the slots. And okay that--those are the kinds of games that have been--those have caused difference over the years, as to whether those are good things or bad things, edicts against playing lotteries. Lotteries are on one view a way in which hope is sold to poor people at bad odds and therefore is exploiting and you can have a position against it. From another point of view, lottery is selling amazing products to poor people, namely hope which nobody else is offering them. So, it's a pretty damn good product from another point of view. None the less, you get into games of skill, and there are two kinds of skill games that we're talking about. Poker is the quintessential strategic game in which winning the game depends upon evaluating an opponent's play and anticipating it, that's the key to it. And that's a key to so much in the life of lawyers and so--all the way through life. That here's this--this wonderful quintessentially American game that through Internet has been extended across the world in a development that has huge muscle in it. There's as almost as much muscle in poker as there is in *** as a spreader of Internet. And yet here is an environment that generates money. So, from my educator's point of view, I am looking for business models that will support the development of the open net. I'm looking for business models that will support open education. And I can see a potential unity of interest with Google. I think I see it in that--it is to Google's advantage if there is a vibrant, explosive, educational, searchable environment on the net. If you think of Harvard education coming up on the net, its videos now with technology--I was just reading about from MIT searchable--word searchable through audio recognition software so that you can search a video and get right to the words, the part of the lecture where the teacher speaks. If you imagine the wealth of university education available open on the net, it's good for the search business, I would think because people like to search. And so, I'm--I'm looking for ways of interesting Google in what we're doing. I would love to do some kind of--I don't know whether you do them, kind of--some forms of conference where we actually talk strategy of longer level and we teach poker and do a poker tournament or something of that variety that would be a kind of a corporate learning enterprise, kind of focusing on the core idea. And I'm sure that if you put your minds to where you would see any number of other ways in which a linking of Google with a Harvard-based enterprise educational game-based driving internet would be a plus. It--there's the additional interest from my point view of poker being the most wonderful law subject. It--poker is interesting from a lawyer's point of view at every level, from the institutional level of my school, how does my school feel about having a Global Poker Strategic Thinking Society and what constrains are put on it. To my town, Cambridge, which has a commissioner that wants to get a license for me to play charity poker, to my state which calls poker a lottery and a game of chance, to my national government which discriminates against online poker to a point where the World Trade Organization has now held us up for contempt and obloquy. And to international law, it's now--we're now--we're now out of step with the rest of the world in terms of online gaming. America which should be the source--I mean, thinking in diplomatic terms, poker quintessentially American, excitement around the world about it. The world wanting to play and yet it's illegal in the United States. The United States is try to repress it. It's just seems so strange to me. So, poker has this extremely interesting quality to it, of interest at every level. And as a teacher I--it just has been a God sent to me, it's lit the last part of my career up and I hope we can really put it across. So, at this point, I would love to open up for questions and just spend the rest of the time with--back and forth. Andrew? >> WOODS: In any event when--when you talk about education, you talk about poker. Poker has the unique ability of engaging people and developing thought in a way that's really fun, which is something that at times is missing from a regular education. I mean when I learned--when I took my math classes, they weren't always as dynamic or as fun to me as some of my other classes or my "not classes" as I called my time when I wasn't in school. But the key of it is, is that poker teaches a flexibility of thought. It teaches skills that are very useful. Poker is realty, when you think about it, the natural evolution of sport. Sport began--you know when we want--we had skills we wanted to encourage youth to develop it, when we had skills that we wanted to maintain in society. The Olympics were about the javelin throw, about running, and about times when we wanted to be able to develop the skill [INDISTINCT] to throw a spear along ways, and run really quickly, and throw a brick a ways, and things like that. Now a days, it's not as useful to me to be able to throw a spear a ways. I mean I very rarely go boar hunting with a spear. I mean, that's just not something that I do. On the flipside, it's incredible useful to me to be able to make good unemotional decisions that have realistic considerations about numeracy and probability and elements that are common to a poker game, elements that I develop when I have to be able to play poker. Be able to really understand what my skill level is. Be able to pick an arena to do battle in, be able to understand when other players are better that me, because I'm not that good of a poker player, but I understand that. So, I'm able to play at levels where I am better than the players that I'm better at--or that I'm playing with. And so, poker teaches a development of what I call situation assessment decision control. The ability to really understand where you sit in a negotiation, whether it's at a poker table, if you take that to the metaphysical level and you're talking about a negotiation, or if you're talking about international diplomacy and the interactions between nations, understanding the rules of the game and understanding the point of offer and counteroffer or bet and raise. And more than anything else, understanding when to fold. What separates a good poker player from a bad poker player is the use of the fold. When is the situation too risky? when is the return not going to be beneficial to you? When is it the time to just say, "Look, it's dead money, cut my losses and run." That skill is something that I don't see being taught in traditional education the way that's engaging to students. And poker, by using a tool, a game that's so engaging, teaches resource management. Teaches all these issue, risk assessment, in a way that really engages students and is something that I think--I'm sure most of you have played poker once or twice or maybe... >> NESSON: How many people play poker in this room? Way to go. >> WOODS: I mean... >> NESSON: We had a question in the back there. >> This is a little bit more [INDISTINCT] philosophical question. >> NESSON: Go for it. >> I'm a big fan of poker, and I think one of the things that makes it interesting [INDISTINCT] that you can also teach [INDISTINCT] >> NESSON: We should get you on the mic here. >> Oh, sorry. One thing that makes it interesting is things like risk preference and risk aversion, but there you have to have real resources at stake. And so, when you have real resources at stake the whole of question of gambling and the various kinds of ethical questions that come up around gambling come up. And so, I'm wondering from a philosophical standpoint when you think about, you know, policy and the United Stales sort of being behind the rest of the world in this regard, I think there's a lot of ethical considerations in there. How do you see overcoming some of those, you know, preconceptions that the people have? >> WOODS: There's absolutely no question whatsoever that compulsive gambling, gambling in of itself, are issues that need to be dealt with in a--in a way that makes sense, that need to be talked about and need to be really discussed in a common sense way. Right now what we do in this country is we say things like poker, craps, roulette, blackjack, those things are bad forms of gambling. Putting your money on the stock market is a responsible choice. Let's do--let's fix social security, let's return the money to the people so that they can invest it on their own on the stock market. That's a good decision, that's something that we recommend as a nation. And yet I don't necessarily know if most people have sufficient levels of education to be able to engage the market in a way that makes sense, or if they're taught that way. You talk about things like addiction. Well, addiction's an issue and it should be dealt with. I would say that there are statistics that prove or that suggest that the levels of addiction in poker aren't nearly as high as they are in games of chance. In games where there's a big payout like the lottery, or games like a roulette wheel, if you put it on your double zero and it hits, it pays 35 to 1. Poker is a fundamentally different game because there's no house, there's no big payoff you're just playing against another player. But that--the addiction question remains. But there are addiction at all levels of society. I mean Google--I've searched on Google before, often times it sends me to amazon.com or a similar thing like that. There aren't very many restrictions about how much stuff I can ran up on my credit card bill. I would say that the addiction to shopping, addictions like that are things that we need to deal with as a society. And right now, we do a miserable job of approaching them in any level of education. So, when you talk about poker, yes addiction and gambling are issues and they need to be dealt with. But taking a tool like poker and throwing it to the side because there's a danger in it doesn't make such sense. It's like asking a carpenter to build a house without using a hammer because he has the potential to hit his thumb with this hammer. >> I agree with you. I'm just wondering how'd you do that? >> WOODS: well, I mean, I think it has to do with a couple of things... >> NESSON: Well, let me--let me have a shot at it. >> WOODS: Go. >> NESSON: The politics of poker are totally fascinating at this point because there mixed up with the politics of gambling more broadly. And the politics of gambling more broadly is mixed up with a bunch of other stuff. So, the big drivers as far as poker is concern has clearly been the television success of the tournament poker play which has brought home to millions of Americans the picture of poker [INDISTINCT] a fairly benign thing. You don't--you know--as you're watching those television things you may be bored but you don't have the feeling that you're watching evil. It just--you don't come away with a moral twist in your stomach like you've just been watching something bad. And so, I think that a tremendous change has taken place in the public from the game having the image that came out of the early days. Poker--poker comes out of a gambling background no doubt about it. And a fascinating one, that migrates with--Texas Hold 'em migrates from Texas to Las Vegas, is connected with the Casinos and organized crime, is prosecuted out of the justice department as part of the overall gambling spectrum of--you know culture that's there. But poker goes through a transition in the public mind, at least I think it's still in process, stimulated heavily by this huge success of television and the huge success of online poker, all right. People who play--you know two penny, five penny poker on their laptops in there bedroom, it's hard to convince them that they're doing something evil. It just doesn't--it just doesn't feel it. On the other hand, politically, separating poker from any other kind of gambling, runs up against strong libertarian arguments. The basic libertarian argument is, I can do any damn thing I want. Whether it's poker, or a game of chance, or ***, or any other thing you can do in your house. Including a lot of physical things that the Supreme Court now says I can do in my house if I want. So the problem of articulating the subject at a higher level of sophistication then has been the case in the past, is to me the political problem of putting it across. You know, it's like--you used to just be able to say gambling and all right the right wing will turn out against it. But boy when you look at that now the churches run bingo, when you look at the bingo stuff in the churches it looks pretty much like a casino when they're running it. And the states are running lotteries, like 40 states running lotteries and what state that isn't doing casino isn't thinking about doing it because why do we let the Indians make the money and all that sort of things. So, I think we're in a very dynamic time and I think that poker potentially can be one of those things where you go from having your first thought about it being gambling, bad, evil, negative reaction, politicians don't want to be associated with it, to a much more positive image. I was very pleased when Obama came out as a poker player, you know, it's like okay, it's okay to be a poker player. Of course, our presidents have been poker players and I mean it's amazing when you actually look at the history of the game. Yes? >> Question here. So, when I was a kid--well, when I was younger, I used to play five card studs, seven card studs, a five card draw, a five stud high-low with a one card draw at the end, and so forth. Now a days, poker is virtually synonymous with Texas Hold 'em. So, I want to know--I'm actually ignorant in these matters. Why did this happen? How did it happen? And is it a good thing or a bad thing? >> WOODS: It happened for two reasons. The first of which is probably the more important one, is television. Texas Hold 'em is the--in one sense, the simplest form of poker, two cards down, five cards up. You can teach it in--you know, what do they say, it takes a minute to learn, a lifetime to master? It's something that can be taught and is very easy for people to understand. So, for television reasons, it works well. From a poker players perspective Texas Hold 'em is the ideal game because you get four opportunities to influence the action. And a poker game for those of you who may not know this, and in Texas Hold 'em, at least, there's pre flop action, flop, turn, river. Each time, there's a round of betting. So, in terms of poker much more than a five card draw or some of the stud games, you have four opportunities for skill to rise to the--rise to the top because in poker the skills is in the betting, pricing your hand appropriately. How do you price your hand at the appropriate level to induce the opposing party to do what you want them to do? How do you price it in an appropriate level to get them to buy or how do price it in an appropriate level to get them to fold? And so, if you have opportunities to do that in Texas Hold 'em, so it's a better game for that purposes, so. >> So, in your example you gave--in the puzzle you gave, you kind of assumed that I'm playing poker against people who are roughly of the same intelligence as I am and who roughly think the same way I am. And this is clearly not the case. I will be playing against some people who are dumber or some people who are smarter, some people who have completely different ways. How does your strategy work with--I'm not working with logicians, I'm not working with people that I know how they're going to view my cards? >> WOODS: Well, I would say that there's a couple of different points on that. The first one of which is the riddle is designed to demonstrate a type of thinking or a concept that's integral to any poker success. The second thing I would say is that often times how players act, something we call table image, your reputation as it were. And you can trade on that, the same way you can trade on any commodity. So, how we--how the--the perception you develop of your opposing players, that they're smarter than you, that they're dumber than you, is something that affects how you act. This is exactly why poker is such a good game for teaching strategic thought because just like this in a market situation--in any situation, you're going to be dealing with opposing parties, some of whom are better than you, some of who are worst than you, which will affect which markets you choose to enter. Which will affect what--how you interact with these people. And the way that reputation develops is a very interesting thing, and it's something that poker players often try to cultivate, very specific reputations. They want to be able what's called a tight-aggressive player. Maybe I don't play very many hands but when I play I'm going to get you to pay me a lot or something, which is meant, in part, to scare people away from hands that you don't want them to be on. But all these reputational facts are skills and strategies that develop at the able precisely because there are various types of play and various types of people. And this is one of the reasons why poker is so good at modeling some of the other interactions that you want to develop. >> NESSON: In law, there is the image, for example, of the country lawyer. I'm just a country lawyer. It's like, watch out when somebody tells you they're just a country lawyer, right? There must be something similar in engineering, that is the presentation of a low key posture on the part of someone who is in fact deeply sophisticated and is about to clean you clock in some fashion or is engineering not competitive in that--in that way? >> Well, when somebody's [INDISTINCT], right? >> I mean... >> Because Google's interface is so simple and it's very forward but I think a lot of people don't understand the underlying complexity [INDISTINCT] >> WOODS: Look around the room. I mean, as a corporate, Google's probably one of the most important corporations in the world, in terms of corporate prestige and the influence it's had. The dress code here is slightly more lax than most Fortune 500 companies. I've only walked around here for a couple of minutes, and I've been to several, like, law firms and things like that, very rarely do they have an organic garden in the middle of the office. And it's a very different perception. But why? Why does Google make those decisions? Why are you trying to project that image? What are you doing in terms of, from a management level, retaining employees and keeping employment happiness high? What are you doing in terms of a competitor's thing, and as your competitors or your business partners come here? What are you trying to project to your business partner who come here for a meeting? Walks around and sees kids zooming around on scooters. I mean, I think the average age here is like 14. I don't know how young the people are who work here. But--I mean, you know, what are you trying to project? I mean, it seems to me that it's, "Look, our results speak for ourselves. You can take us--you know, we're incredibly smart people. We don't have to dress up to impress you." I mean I'm, you know, one of the only people here wearing a suit. So, I mean, I'm trying to impress people. But... >> [INDISTINCT] >> WOODS: Are you going to tell me? >> That's bad. >> Hey. You said one thing I'm--a minor point, but curious about it. You said your charity poker tournament was declared illegal. Now, I come to live in Massachusetts for a number of years, so I know one other factoid. So, my question is, why is playing backgammon for money legal but playing poker isn't? >> WOODS: We actually--we over simplifies a tad. It wasn't that it was exactly illegal. What happened was the Massachusetts State Attorney General release an opinion letter that said that for their considerations, they thought poker was a lottery which gave the local municipalities the authority to decide how they wanted to deal with it. Cambridge took the most conservative stance which required any 501(c)(3) or any none profit organization to apply for and get a permit before they are able to hold a charity poker tournament, in this case. So, we couldn't hold it without going and getting a permit. So, it was illegal to hold the tournament without getting a permit. A Permit is difficult to get. It's a big pain in the butt. >> Okay. I was making assumptions. >> WOODS: So, yeah. So... >> NESSON: And I was really discouraged when I went down to the commissioner and asked him about getting a permit and he told me that Harvard was not a 501(c)(3). It's not a charity. Harvard is non-charity. Yes, pass there. >> So, you say that you want students to learn like the strategy and the things behind poker. There is also a mathematical sides say--say kids in--in high school, you know, the odds of some--you hitting a certain hand or something like that. How would you see--I guess the government reacting to teaching high schoolers how to play poker when it's illegal? I mean, we teach kids how to drive before they're 16 but that's illegal to drive before you're 16. >> WOODS: It's a couple of different things. First of all, poker is not really illegal. It's restricted in... >> Right, right. >> WOODS: ...some places. It's not illegal anywhere. In California, I mean, Bay 101 is like three blocks from here. >> Right. >> WOODS: Some of you may have been there. But the point is, is that like, when it comes down to... >> NESSON: Nervous laughter. >> WOODS: When you talk about teaching poker, it's always going to be a political sensitive issue. Right now poker is still essential being chastised for the neighborhood it grew up in. Poker came out of Vegas, came out of the wild west, came out of, you know, hustlers and card [INDISTINCT] and all these stuff. And that's--that's still kind of hanging over the game. So, it's going to be political sensitive. But the more you unpack the game, the more you see there's really nothing morally objectionable. It's no more morally objectionable playing poker than it is to playing chess. And I think that carries over. When I say things now like poker is really much closer to chess than it is to craps, that resonates to people. People say, "Okay, that makes sense to me." And so, I think that that perception is changing. All it's going to take is school districts being comfortable with it, and parents being comfortable, and teachers being comfortable introducing this game which can really interest students in concepts of numeracy and things like that. >> NESSON: So, let's make it the last one. Pass it back--pass it back here. We're right up to 2 o'clock here. >> So, a couple of things that this reminded of. Do you [INDISTINCT] that Aaron Brown's the poker face of Wall Street? >> WOODS: I--I'm familiar with the book. Yes. [INDISTINCT] >> Because the--one of the things he said in it--because you were saying that poker comes from this dodgy background. But what he says in there was that poker was the original venture-capital environment because people would be able to go into there and come out with money and start a business. And it was a way of, you know, shuffling money around in the community, literally it was. That's one of his key points in the book. So, you just--I want to make sure that you get him to speak of this in your next because he's brilliant. >> WOODS: Yeah. I actually haven't read his book yet. I've picked it up in Barnes & Noble the other day and I made note on my PDA to go find him. >> Yup. Track him down. And The other person is Jane McGonigal, who I think, Charlie, you've met before, who's a--she does lots of work on game design and development. And she's the person who's responsible for getting everyone at Techrons is playing Werewolf, which is like--I don't know if you know Werewolf, but it's like poker without any odds at all, it's just pure bluffing. And that--she'd be a great person to talk about this because that--she can guide you to other games that may be you more acceptable to people that you can stage into poker. >> WOODS: Very interesting points. I mean, we'll certainly look them up. >> Okay. >> NESSON: Thank you all very much for coming.