From the CD-ROM "Concepts and strategies"
Emergence in poker
by Peter Small
Emergence is currently a very popular concept. It is often used to describe the unpredictable self-organization that appears in complex systems. It is the bane of forward-planning, but is the life-blood of the entrepreneur. Biological systems use emergence to create order and organization. They also take advantage of emergence to exploit new niches in the eco-system.
Unfortunately, it is hard to explain how it happens and even harder to explain how this phenomenon can be used to advantage.
There are several technical explanations of emergence in the references section of this site, but, they won't tell you how to use it to advantage. I learned how to do this, not by reading technical treatise, but by playing poker. This knowledge gave me a valuable insight into the subtleties of biological evolution and of entrepreneurial strategy.
Using emergence to win at poker
The most popular game in the London poker clubs of the 1960's was a variation known as "five card stud poker with a short deck" This was the game preferred by most professionals because of its high skill to luck ratio. It was played with a regular deck of cards but with the twos to sixes removed. This gives a thirty-two card deck: ace high with the lowest card a seven.
The game starts by all players putting a small amount of money (the ante) into a central kitty (the pot). The first card is dealt face down to each player followed by a card face up. Then there is a round of betting where players can call, drop out or raise. In this round, if a player doesn't like the first two cards they are dealt they can drop out without contributing any more to the pot. For those who stay in, another card is dealt face up and there is another round of betting. Two more rounds of face up cards with betting sees the final betting taking place with each player left displaying one card face down (the card in the hole) and four cards with their faces exposed.
The strategies of players vary immensely, but they can be grouped into two broad categories: the carabino strategy and the open strategy. The carabino strategy is a safe and steady style which relies upon playing from strength. At its extreme, it can mean only staying in to play a hand if the first two cards dealt are aces (one showing the other hidden). In other words, the carabino strategy allows the players to play only if their cards cannot be beaten by any other hand on the table.
At first thoughts, the carabino strategy seems unbeatable. Always playing from strength and only playing or continuing if the odds are heavily in your favor. However, the professional poker player doesn't play this way, he plays what is called "an open game"; a strategy which allows him to prey upon the novices who adopt the more careful carabino strategy. He plays with the anticipation of an emergence occurring that will give him a winning advantage.
Let's take the case of the really cautious player who will only bet in the first round if he has been dealt two aces back to back. A professional poker player will have very quickly recognised the players style of play and be aware of the near certainty that the careful player has aces back to back. The professional might have, say, a nine showing and a seven in the hole. He'll look around at all the other cards and if there are no seven or nines showing he'll call the bet.
On the second round, say neither the careful player nor the professional improve, perhaps the careful player gets a king and the professional gets a queen. If no other player shows any improvement the careful player can be confident in making a large bet because he knows he has the highest cards on the table. At this stage the professional will assess the chances of each of the players improving in the next round. If another ace or king has come out he'll know that the chances of the careful player's hand improving is lessened. If there are no other nines or queens showing, the professional will know that with the short deck there is a very good chance of an improvement to his own hand. He will then call the bet, perhaps even raising the stakes even though he knows he has an inferior hand.
When the next card is dealt to each player, if the professional player improves and the careful player with the two aces doesn't, the professional will be in an advantageous position: even though he has an inferior hand. To see why, let's say the professional has drawn a nine (likely, because there are three left to come) and the careful player has drawn a jack. The careful player must assume that there is a strong possibility of the professional having more than just the two nines: probably three nines. Especially if the professional had raised into the ace in the round before.
As soon as the professional has a showing advantage, he'll make an extremely high bet. This places the careful player in a dilemma. He'll know the professional might be bluffing but can he risk taking a chance? Its not only this bet he must call, he knows that there will be a further card to come and another round of betting which could force him into taking an even costlier risk. Invariably, the cautious player will fold his cards and drop out, even though he has the winning hand.
In this way a professional poker player can win more hands than the normal run of luck would allow. He will not win every time, but the open play will ensure that over a series of several hands the professional will nearly always come out as a winner.
Now, if we abstract away from this poker game scenario the principal essence, we find that the strategy of the professional poker player is to anticipate a sudden unpredictable change. The professional poker player isn't calculating the odds of his hand against the opponents hand, he's counting on an emergence which will provide an opportunity to engineer an advantage. His cards give may be weaker but they give him more chances of an improvement than his opponent.
Biological systems use this same strategy. They carry a surplus of genes that are not always put to use, but, if an eco-system changes they will be available to be called upon to meet any new challenge or take advantage of a new opportunity.
If you map this across to the strategy of this site, you can think of an archive of content as being surplus genes that can be strategically called into use if an opportunity arises. If you map it across to the Kempelen Box, you can see how the people who have agents in this box can be thought of as genes, ready to be brought into use if a visitor has a need for them in a particular situation.
It is this strategy, of grouping a number of possible solutions together and holding them in reserve, that allows biological organisms and businesses to take advantage of emergent situations. This strategy is described in the CD-ROM "How God Makes God", where it is illustrated by the following dialogue:
I see you are back in business again?
Not yet, all I have is this office.
Have you got any ideas?
Yes. I have made a short list of possible business ventures to go into.
So you have to decide which on this short list to go for?
No. I shall probably have a go at them all.
All at once?
Yes. They all seem quite good ideas and I see no reason to pick any particular one.
But wouldn't it be more efficient to go for just one of them.
Certainly. If I knew which of them would be successful.
But you said they were all good ideas.
Yes, but I know from experience that even good ideas have no better than one chance in six of getting off the ground.
So how many ideas have you got on your list?
So trying out all six will make it certain that at least one of them will get off the ground?
No, but the odds of succeeding are improved.
What are your chances of getting one of them off the ground then?
Each idea has five chances in six of being unsuccessful.
I asked the chance of one being successful.
I know, but to work that out you have to use the trick of working out the chances of being unsuccessful first. The probability of all six being unsuccessful is about one chance in three. This means that the chance of one of them succeeding is 2 chances in three.
What are you going to do if none of the ideas work out?
Put together another list of six. The chances of failing with two lots of six is one third multiplied by one third. One ninth.
So this gives you nearly a ninety percent chance of success?
Yes, there is a reasonable cause for hope. And, one success can more than make up for the cost of a whole lot of failed tries.