Heuristics, biases, and rationality among casino blackjack players

When I turned 21, armed with basic knowledge from Edward Thorp’s Beat the Dealer, I decided to try my luck at blackjack. Beat the Dealer was the first book to accurately describe “Basic Strategy”—the best way to play each hand given casino rules and no knowledge of cards removed from play—and the first book to describe card counting systems that could, in principle, give players an advantage. I was surprised that the players and dealers who seemed most knowledgeable about the game “corrected” my play in ways that consistently deviated from Basic. Why would the most experienced players consistently deviate from a strategy I knew to be optimal?

A few years later, after moving to Prague, I was puzzled for a different reason. Experienced players there also shared false beliefs about how to play, but their beliefs were different from those in Las Vegas. Czech players were noticeably less likely than their Las Vegas counterparts to hit (take additional cards) or to double the size of their bets when Basic said they should, and—unlike in Las Vegas, where corrections to my “mistakes” felt intended as helpful advice—Czech players were often upset, sometimes leaving the table in a display of anger. Why should groups of experienced players in two places converge on different false beliefs? And why should the Czech—but not Las Vegas—players get angry about my misperceived poor choices, which I knew to have an unpredictable impact on their own success?

Those two paragraphs introduce one of two articles just accepted for publication (hooray) that challenge the way those questions usually get answered. They get at the heart of what this Substack is about: decision-making in the wild isn’t what lab experiments about heuristics, biases, and human rationality often imply.

Both papers explore the puzzles described above through the lens of what I refer to as culture-bound heuristics: strategies for solving problems, making judgments, or coming to a decision that emerge from, and only make sense within, specific cultural contexts. The first paper takes a deep dive into one particular strategy often taught by dealers and other players to beginner blackjack players to help them decide whether to hit (take another card) or stand (stop taking cards and end one’s turn), two of the most frequent blackjack decisions. One step in the heuristic is to imagine that all following cards will be 10-value cards (10s, jacks, queens, and kings). That belief is wrong more than twice as often as it’s right. Players often use the heuristic to imagine the next three cards in a row. In those cases the heuristic’s prediction will be wrong more than 97 times out of 100. Perhaps not surprisingly, that assumption is also recognized as transparently false by the dealers and players who teach it, and by the beginners who learn and use it. Anyone familiar with a standard 52-card deck of playing cards, or who has played blackjack for more than a few minutes, will know it to be false.

Why would blackjack players use a strategy based on transparently false likelihood judgments? The surprising answer is because it works. It gets 58 of the 60 hit–stand decisions that are remotely ambiguous correct; it is easier to teach and learn than the optimal strategy; and the two choices it gets wrong have a trivial impact on the players’ expected losses (players using this strategy do 0.04% worse than perfect Basic Strategy users, losing 4 more cents for every $100 bet). Remarkably, it outperforms the hit–stand playing strategies used by even the most experienced blackjack players, despite the fact that players systematically improve with experience.

It better explains previous findings about putative cognitive biases: likelihood miscalibration ascribed to experienced blackjack dealers (Keren & Wagenaar, 1985) and risk aversion (Wagenaar & Keren, 1985) or omission bias (Carlin & Robinson, 2009) ascribed to blackjack players. It also predicts the only two hit–stand choices that blackjack players increasingly get wrong as they gain playing experience: the two hit–stand choices the heuristic gets wrong (for you blackjack aficionados, that’s whether or not to hit a hand total of 12 against the dealer’s exposed 2 or 3).

The second paper steps back to consider characteristics of culture-bound heuristics more generally, not just in casinos. Along with three cases from blackjack, it considers the example of traditional Micronesian canoe navigation techniques (Hutchins & Hinton, 1984). These navigators, using techniques now lost to most Micronesian cultures, imagine that the islands move while their canoes stand still. Similar to the blackjack heuristic just described, they know that belief to be false, yet they imagine it to be true. By doing so, they are able to navigate more efficiently and reliably across long distances, and often over several days.

Below are the titles and abstracts of both papers. If you’d like copies of the full manuscripts, just reach out—they haven’t been published yet, but I’d be happy to share pre-publication versions.

Paper 1 (the 10-heuristic in blackjack): “A heuristic based on transparently false likelihoods improves gamblers’ expected value in the wild”

ABSTRACT: Casino blackjack players learn a simple heuristic that helps them decide when to take additional cards, the most common blackjack decision. The heuristic assumes that all upcoming cards will be 10-value cards, even though that assumption is true fewer than one in three times. The heuristic results in systematic error, but it is also adaptive: it is easier to learn than the optimal strategy, the cost of using it is trivial, and its use is associated with better expected returns. The heuristic helps explain inconsistent previous findings about blackjack likelihood judgments and decision biases. The research relies on mixed methods including qualitative data from 1.5 years of ethnographic fieldwork as a blackjack dealer and player, and quantitative data from interviews with players about how they play each blackjack hand. The heuristic is used as a case to support several theoretical contentions: (a) despite established precedent, gambling is not a good domain-general metaphor for decision making under risk or uncertainty; (b) even in a small-world domain where outcome likelihoods can be calculated and monetary outcomes are unambiguous, using subjective probability to infer expected value may be both uncommon and non-normative; and (c) a focus on narrow, domain- and culture-specific heuristics and biases—despite their limited scope—offers valuable lessons about how, and how well, people make decisions.

Paper 2: “Culture-bound heuristics”

ABSTRACT: Drawing on theoretical insights regarding the interdependence of culture and cognition, this paper argues that culture fundamentally shapes both decision processes (heuristics) and how well they work (e.g., biases). It further argues that the importance of culturally interdependent heuristics (“culture-bound heuristics”) has been underappreciated because of theoretical and methodological norms that tend to remove culture from consideration. The paper first considers theoretical background: content- and context-impoverished norms in how judgments and decisions under uncertainty have been modeled and empirically studied, followed by critical responses to those norms. Second, it uses four case studies to support an argument that decisions in the wild are often cultural-domain-specific (e.g., only used for blackjack or for Micronesian canoe navigation) and inseparable from systems of beliefs, values, practices, task environments, and people. Furthermore, these cases suggest that by removing cultural content and context from experimental stimuli to get at putatively basic cognitive processes, researchers may have systematically overgeneralized and misidentified both heuristics and biases. The paper concludes by recommending expanded methodological and theoretical approaches for identifying and evaluating judgment and decision making that take culture’s importance to cognition seriously. This expansion emphasizes the value of (1) ethnographic methods that richly explore the decision task environment and folk conceptions of decision processes as part of the hypothesis generation stage; and (2) cross-cultural and longitudinal comparative research to test those hypotheses and further explore how decision processes and their effectiveness vary over time and place “in the wild.”