Synergistic Information Processing Encrypts Strategic Reasoning in Poker

Abstract

There is a tendency in decision-making research to treat uncertainty only as a problem to be overcome. But it is also a feature that can be leveraged, particularly in social interaction. Comparing the behavior of profitable and unprofitable poker players, we reveal a strategic use of information processing that keeps decision makers unpredictable. To win at poker, a player must exploit public signals from others. But using public inputs makes it easier for an observer to reconstruct that player's strategy and predict his or her behavior. How should players trade off between exploiting profitable opportunities and remaining unexploitable themselves? Using a recent multivariate approach to information theoretic data analysis and 1.75 million hands of online two-player No-Limit Texas Hold'em, we find that the important difference between winning and losing players is not in the amount of information they process, but how they process it. In particular, winning players are better at integrative information processing-creating new information from the interaction between their cards and their opponents' signals. We argue that integrative information processing does not just produce better decisions, it makes decision-making harder for others to reverse engineer, as an expert poker player's cards act like the private key in public-key cryptography. Poker players encrypt their reasoning with the way they process information. The encryption function of integrative information processing makes it possible for players to exploit others while remaining unexploitable. By recognizing the act of information processing as a strategic behavior in its own right, we offer a detailed account of how experts use endemic uncertainty to conceal their intentions in high-stakes competitive environments, and we highlight new opportunities between cognitive science, information theory, and game theory.

Keywords: Encryption; Higher level reasoning; Human information processing; Information theory; No-Limit Texas Hold'em; Observational data; Poker; Strategic behavior.