#AIS: FiveThirtyEight's Nate Silver on how gamblers think

The talk opens with an introduction of Nate Silver as editor-in-chief of 538, who recently played in the hosts' poker game. A short exchange follows about who lost that night: the speakers say Nate was the big winner and that others "donated" to his new model, with the hosts joking about it.

Nate says it was his largest cash-game win ever, by a factor of two (the transcript first says five, then corrects to two). A host jokes that his speaker fee has been canceled in return, and then introduces the talk, titled "the mind of a gambler".

Silver says he is writing a book on gambling, risk and rationality. Part of the research involved talking to people about global risks, including the risk of nuclear war, which he calls not very cheery. The rest involves people who take or manage risk for a living and have real skin in the game, not a salaried actuary.

He started with poker players and sports bettors. He is a former poker player who still plays recreationally, and says he is currently number 301 in the global poker rankings, a figure he gives himself. He is now speaking more to VCs, founders and hedge fund managers and sees many similarities, in personality traits and modes of thinking, and perhaps a little in political views.

He warns that the book is a work in progress, roughly halfway through research with nothing written, so his views may change. He plans to start with the obvious traits and move toward less obvious ones.

His first point is that successful gamblers think in probabilities. It is not only understanding probability but being comfortable with uncertainty and willing to bet on an uncertain basis, which he treats as table stakes for any field involving risk.

In poker, he adds, you probably need a fair amount of mathematical ability. Solvers now compute game-theory-optimal strategies for every situation, which are too complex to memorize, so players must develop mathematical intuition behind them. He says even players known for reading tells and table talk are changing, with Phil Helmuth as perhaps the one exception.

As an example he cites a conversation with Daniel Negron, whom he calls one of the five best players of all time. Negron told him that about four years ago he realized the "solver kids", the math whizzes, were better than him at certain forms of poker. He remade his game around computer solutions and, Silver says, improved his results quite a bit. In VC, Silver suggests, people may do less formal modeling than in an election model, but the intuition matters more than the application.

His second trait is that successful gamblers are highly competitive. He hears repeatedly that they want to prove people wrong and outsmart the competition, a motivation he thinks may be stronger than the financial one. Since the average poker player and the average sports bettor lose money, he says, you cannot settle for being average.

From the interviews he concludes that human beings are a competitive species and that getting people to get along in society is hard. In his view capitalism and democracy offer managed forms of competition, a better way to channel those urges than something too centrally planned. He says the people in the room and those he interviews sit at the high end of the competitive scale.