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Two hospital weeks led to poker
Leaving academia
Annie Duke was studying cognitive science at the University of Pennsylvania and on her way to becoming a professor when a stomach problem put her in the hospital. She missed that year's academic job market, which is seasonal. The National Science Foundation stopped paying her once she left school to recover.
She needed money, so she started playing poker and put graduate school on hold. She turned out to be good at it and enjoyed it, and it felt like a collision between what she had studied and real life.
The speaking career
About eight years into poker, a retreat of options traders asked her to speak about how poker might inform decision-making and handling risk. She was not the first choice: Eric Seidel had been asked to give the talk in 2002, hates public speaking, and referred her. Preparing it, she noticed that poker delivers feedback within 30 seconds, which should produce learning, and players were not learning well. The audience started referring her to other groups, and a second career speaking about decisions took off.
She nearly became an options trader a little after that. Then poker got on television, and she decided to try that instead.
How do options traders put odds on the future?
Fischer Black and Myron Scholes published their option pricing formula in 1973, building on work by Robert Merton. The formula prices an option from the current price of the underlying asset, the strike price, the time to expiry, interest rates, and the asset's volatility. Volatility is the one input that has to be estimated, which keeps traders thinking in ranges of possible outcomes. Scholes and Merton received the 1997 Nobel Memorial Prize in Economic Sciences for the method.
How did television turn poker into a boom?
Hole-card cameras let viewers see players' hidden cards, and they first appeared on the British show Late Night Poker in 1999. In 2003 Chris Moneymaker, an amateur who qualified through an online satellite tournament, won the World Series of Poker main event. Entries in that event grew from 839 in 2003 to 2,576 in 2004 and 5,619 in 2005. Broadcasts of the event on ESPN helped drive that growth.
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