June 13, 2011
by Julia Galef

Ben Morris is a friend-of-a-friend of mine who recently competed in a contest sponsored by ESPN called “Stat Geek Smackdown,” in which the goal was to correctly predict as many of the NBA playoff games as possible. For each correct guess, a contestant received 5 points.

Heading into the final game between Miami and Dallas, Ben was in second place, trailing just 4 points behind a veteran stat geek named Ilardi. By most estimates, Miami had about a 63% chance of beating Dallas. But Ben realized that if he and Ilardi both chose Miami, then even if Miami won the game, Ilardi would still win the competition, because he and Ben would each get 5 points and the gap between their scores would remain unchanged. In order for Ben to win the competition, he would have to pick the winning team *and* Ilardi would have to pick the losing team.

So that created an interesting game theory problem: If Ben predicted that Ilardi would pick Miami, since they were more likely to win, then Ben should pick Dallas. But if Ilardi predicted that Ben would be reasoning that way, then Ilardi might pick Dallas, knowing that all he needs to do to win the competition is to pick the same team as Ben. But of course if Ben predicts that Ilardi will be thinking that way, maybe Ben should pick Miami…

What would you do if you were Ben? You can read about Ben’s reasoning on his excellent blog, Skeptical Sports, but here’s my summary. Ben essentially had two options:

(1) His first option was to play his Nash equilibrium strategy, which is a concept you might recall if you ever took game theory (or if you saw the movie “A Beautiful Mind,” although the movie botched the explanation). That’s the set of strategies (Ben’s and Ilardi’s) which gives each of them no incentive to switch to a new strategy as long as the other guy doesn’t. The Nash equilibrium strategy is especially appealing if you’re risk averse because it’s “unexploitable,” meaning that it gives you predictable, fixed odds of winning the game, no matter what strategy your opponent uses.

In this case — and you can read Ben’s blog for the proof — the Nash equilibrium is for Ben to pick Miami with exactly the same probability as Miami has of losing (0.37) and for Ilardi to pick Miami with exactly the same probability as Miami has of winning (0.63). (You might wonder how you should pick a team “with X probability,” but it’s pretty easy: just roll a 100-sided die, and pick the team if the die comes up X or lower.)

If you do the calculation, you’ll find that playing this strategy — i.e., rolling a hundred-sided die and picking Miami only if the die came up 37 or lower — would give Ben a 23.3% chance of beating Ilardi, no matter how Ilardi decided to play. Not terrible odds, especially given that this approach doesn’t require Ben to make any predictions about Ilardi’s strategy. But perhaps Ben could do better if he were able to make a reasonable guess about what Ilardi would do.

(2) That leads us to option two: Ben could abandon his Nash equilibrium strategy, if he felt that he could predict Ilardi’s action with sufficient confidence. To be precise, if Ben thinks that Ilardi is more than 63% likely to pick Miami, then Ben should pick Dallas.

Here’s a rough proof. Call “p” the likelihood that Ilardi picks Miami, and “q” the likelihood that Ben picks Miami. Then we can assign probabilities to each of the outcomes in which Ben wins:

Since the two outcomes are mutually exclusive, we can add up their probabilities to get the total probability that Ben wins, as a function of p and q:

Probability Ben wins = .37p + .63q – pq

Just to illustrate how Ben’s chance of winning changes depending on p, I plugged in three different values of p to create three different lines: For the **black line**, p=0.63. For the **red line**, p < 0.63 (to be precise, I plugged in p=0.62, but any value of p<0.63 will create an upward sloping line). For the **blue line**, p > 0.63 (to be precise, I plugged in p=0.64, but any value of p>0.63 will create a downward sloping line).

**If p = .63,** that renders Ben’s chance of winning constant ( .233) for all values of q. In other words, if Ilardi seems to be about 63% likely to pick Miami, then it doesn’t matter how Ben picks, he’ll have the same chance of winning (23.3%) as he would if he played his Nash equilibrium strategy.

**If p > .63**, Ben’s chance of winning decreases as q (his probability of choosing Miami) increases. In other words, if Ben thinks there’s a greater than 63% chance that Ilardi will pick Miami, then Ben should pick Miami with as low a probability as possible (i.e., he should pick Dallas).

**If p < .63**, Ben’s chance of winning increases as q (his probability of choosing Miami) increases. In other words, if Ben thinks there’s a lower than 63% chance that Ilardi will pick Miami, then Ben should pick Miami with as high a probability as possible (i.e., he should pick Miami).

So what happened? Ben estimated that Ilardi would pick Miami with greater than 63% probability. That’s mainly because most people aren’t comfortable playing probabilistic strategies that require them to roll a die – people will simply “round up” in their mind and pick the team that would give them a win more often than not. And Ben knew that if he was right about Ilardi picking Miami, then Ben would end up with a 37% chance of winning, rather than the 23.3% chance he would have had if he stuck to his equilibrium strategy.

So Ben picked Dallas. As he’d predicted, Ilardi picked Miami, and lucky for Ben, Dallas won. This one case study doesn’t prove that Ilardi reasoned as Ben expected, of course. Ben summed up the takeaway on his blog:

Of course, we shouldn’t read too much into this: it’s only a single result, and doesn’t prove that either one of us had an advantage. On the other hand, I *did* make that pick in part because I felt that Ilardi was unlikely to “outlevel” me. To be clear, this was not based on any specific assessment about Ilardi personally, but based my general beliefs about people’s tendencies in that kind of situation.

Was I right? The outcome and reasoning given in the final “picking game” has given me no reason to believe otherwise, though I think that the reciprocal *lack* of information this time around was a major part of that advantage. If Ilardi and I find ourselves in a similar spot in the future (perhaps in next year’s Smackdown), I’d guess the considerations on both sides would be quite different.

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