A little logic, poker and beating a dead horse - Printable Version

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A little logic, poker and beating a dead horse - Kurt - 01-28-2022

Sometimes things all come together. First, let's start with the old cliche "Never give up!" Is this really the best advice?

There's a common logical fallacy called the sunk cost fallacy. The sunk cost fallacy is the belief that a person should continue to invest in a certain idea or endeavor, despite any negative consequences, because of the time and money that they have already invested in it.

A foundational concept in poker, uses the same concept, which is that it doesn't matter how much money you've already got in the pot. The only thing that matters is the odds/costs/payoff from now on. You could have $1 or $10,000 in the pot. It doesn't matter.

Which brings us to the conflicting ideas of "Never give up" vs. "No sense in beating a dead horse". I feel that logic and Poker 101 tell us that sometimes it's best to move on despite how much we have invested in certain things. The hard part is accurately calculating when that point is.

IMO, this isn't really about giving up the end goal. In poker, the goal is to win money in the long run, knowing that you won't win every hand and that losing as little as possible is just as important as winning as much as possible. In business, you aren't quitting if you fold a hand that isn't working out to focus time and money on something that will give you better odds.