Rock, Paper, Scissors
"...It's supposed to be a game of pure luck, not skill
— and indeed, if humans were able to be perfectly random,
no one could gain an upper hand over anyone else.
There's one problem with that reasoning: Humans are terrible at being random.
...there are two paths to victory in RPS: Eliminating one of your opponent's options
— for example, influencing her not to play Paper
— and forcing her to make a predictable move.
In both cases ..."the key is that it has to be done
without them realizing that you are manipulating them."
...Expert players have observed that inexperienced ones tend to lead with Rock.
...remember the mantra "Rock is for rookies,"
and simply throw Paper at the outset of a game to earn an easy first victory.
"Rock is for rookies" should be kept in mind against more experienced players, too.
They won't lead with Rock — it's too obvious — so use Scissors against them.
This throw will either beat Paper or tie with itself.
If your opponent makes the same move twice in a row, t
hey almost certainly won't make that move a third time.
...With that option eliminated,
you're guaranteed either a victory or a stalemate in the next round.
If you see a "two-Scissor run," for example,
your opponent's next move will be either Rock or Paper.
If you throw Paper, then, you'll either beat Rock or play to a draw.
...you can use the power of suggestion to influence your opponent's next move.
When discussing a game, for example, gesture over and over again
with the move that you want your opponent to play next.
...when people are not paying attention
their subconscious mind will often accept your 'suggestion,'"
...players often imitate their opponents' last moves.
Announcing your next move before a round starts
also seems to be an effective mind trick, though it'll only work once.
If you say you're going with Paper, for example,
your opponent thinks you won't...
...they'll shy away from Scissors (which beats Paper),
and choose Rock or Paper instead.
When you do end up throwing Paper, you'll score a victory or a tie.
...your opponent will often try to come back from a loss or tie
by throwing the move that would have beaten his last one.
If he lost using Rock, for example,
he'll likely follow up by throwing Paper.
Knowing this, you can decide what move to follow with yourself.
...monkeys show the same behavioral pattern.
...monkeys, like humans, are capable of analyzing past results
and imagining a different outcome...
Humans can take the logic one step further,
by imagining what their opponents might be imagining.
There's one more ploy
..."When you suggest a game with someone,
make no mention of the number of rounds you are going to play.
Play the first match and if you win, take it is as a win.
If you lose, without missing a beat start playing the 'next' round
on the assumption that it was a best two out of three.
No doubt you will hear protests from your opponent but stay firm and remind them
that 'no one plays best of one,'"..."
Via ConvergEx's Nick Colas,
...The big lessons: we have trouble thinking independently, we inadvertently pick favorites, and distractions really hurt rational decision making. The best hints for winning RPS: rookies throw “Rock” on the first go, and “paper” is the least used choice of the three options. When in doubt, go with that.
There is an old Wall Street story, perhaps apocryphal, about a hedge fund manager who fell in love with a house in Greenwich in the mid-1990s. This now-titan was just another guy with $100 million of walking around money at the time, so he could afford to tell the listing agent “I bid $10 million, cash” for the house, which was listed at $12 million. The trouble was that the head of equities for a very large brokerage also wanted the house. Not knowing our hero, he called the hedgie at work; “I will pay you $1 million to walk away. My wife wants that house.” Our now hedge fund master was offended. His riposte: “Come to my house for dinner, and we’ll flip a coin for the house. I don’t need the million.” The offer only generated a dial tone. But he got his house.
...Rock-Paper-Scissors' roots go back hundreds of years in Asian societies, and its long lasting appeal comes from both an inherent simplicity and the ability for the dedicated individual to improve through practice. The basic rules, where something beats one thing and is beaten by another, generate a stable system that should generate random results. It is a coin toss without the coin, ideally.
...RPS is, in fact, a useful example of how easy it is to skew the results of a theoretically balanced construct once you introduce the human element to the mix. Academics and researchers from fields as disparate as mathematics to behavioral psychology actually incorporate RPS into their experiments. And it doesn't take long to find some lessons for investing and even life. We culled through some of the more widely cited experiments using the game as well as other source material and it wasn't too hard to generate a list of key learnings. Call them RPS 101…
Lesson #1 – People who need people aren't lucky at RPS. ...Researchers had 360 college students play 300 rounds of the game, noting their choices each time. They found that if a player lost, they were likely to throw a different choice in the next game. Moreover, the sequence of their choices tended to mirror rock, then paper, then scissors, just as in the name of the game itself. Winners tended to choose their winning throw again. Win with rock against scissors, throw rock again. Not random. Not even a little.
This obviously goes against the ‘Smart’ way to play (be as random as possible), and there are other experiments that support the notion that people have trouble thinking independently as they make sequential choices. Researchers at Indiana University found that, using a modified version of RPS, they could get subjects to cluster around certain outcomes rather than think independently. Researchers in London took another twist – blindfolding the participants to see if that made any difference to the number of ties (both parties choosing the same option). When both players were blindfolded, the number of ties was 33.3%, as expected. But when only one was blindfolded, that rose to 36.3%. Not a large jump, but big enough to convince researchers that people do unconsciously mirror each other if they can.
Lesson #2 – Distractions matter a lot. If you search online for RPS tournaments – and there are a lot of them around the world – you will find that many participants dress with a certain flair. Sartorial statements range from Cat-in-the-hat style getups to the genuinely racy. Things that make South Beach resemble colonial Williamsburg. That’s not exhibitionism (mostly, anyway); that’s strategy. A distracted opponent will be more predictable and easier to read.
A fellow named Graham Walker, a five-time organizer of large scale RPS tournaments and book author on the subject, has some pointers for players:
Rookies play “Rock” on the first go more often than not, especially if they are male. Experienced players try paper first, but they may be trumped by someone playing the fool but actually savvy to the game with scissors. Pass the iocane powder if you followed that…
Inexperienced players will not usually play the same throw three times in a row. So after two, look for one of the other options.
Rookies will also play the option that would have beaten their last throw.
Mess with their heads. Tell your opponent what you are going to throw. And then follow through, sometimes…
Actual choices made in competition don’t follow the 33/33/33% paradigm. Walker estimates that “Paper” only gets the nod 29.6% of the time. So when in doubt, go with that.
Watch others play and look for “Tells”. Just like in poker, no one is a perfect ramdomizing machine with zero give-aways. You aren’t playing the hand, you are playing the other players….
Lesson #3 – RPS is life, or at least the part of life that makes investment and other choices. Behavioral finance has made its fame and fortune telling us that humans are really bad at making rational choices consistently. The lessons behind RPS studies support that thesis and expand it. We are, at every level, predictable creatures of habit. Even when the challenge is something simple, like choosing the numbers 1, 2 or 3 or their RPS equivalent.
And yet in this downbeat message, there are signs of hope. Every human – and certainly every group of humans – has certain predictable traits. Rookies go with “Rock” – and they buy every momentum name that makes it to the top half of the fold in the newspaper. We all tend to underweight “Paper” because it feels flimsy. And who exactly was overweight bonds at the end of last year? Yep, not many people. Rates were going higher – bonds were too flimsy to own.
The bottom line is that RPS is a lot like investing. You don’t have to beat the odds – you have to beat the opponent by finding their patterns and weaknesses. And rest assured – they have them.
Posted by Abner Doon at 11:01 AM