Thu, Aug 31, 1:29pm by Poker Guru
When players at a final table start to negotiate a deal you will notice that it is far from straightforward how to do it fairly. Players will have different opinions about that and it is not only negotiation tactics—it is actually quite tricky.
If you are down to two players it is easy to make a fair deal. Suppose the first prize is $10,000 and the second prize is $4,000. Player 1 has 60% of the chips and Player 2 has 40% of the chips.
Since each player is guaranteed at least the second prize of $4,000 they are basically playing heads-up for the difference between first and second prize, i.e. $6,000. Assuming they are of equal strength heads-up Player 1 has a 60% chance of winning. Player 1 should therefore get $4,000 + 60% * $6,000, i.e. $7,600. Player 2 should get $6,400.
As soon as you have three players involved it gets more complicated. If you have 50% of the chips you have a 50% chance of winning the tournament but how big is your chance of winning 2nd and 3rd prize, respectively? This is where it gets tricky.
Last week I tried to explain why the value of tournament chips is not linear, and let me give you a fresh example to explain why: Three players are left in a tournament and they have exactly 10,000 chips each.
The top three prizes are $12,000, $6,000 and $3,000. The total remaining prize pool is $18,000 which means that each player’s equity at this point is $7,000. They have an equal chance of winning 1st, 2nd and 3rd prize.
Suppose that two of the players go all-in against each other and one of them is knocked out. The winning player now has a 2:1 chip advantage and a 2/3 chance of winning first prize. But what happened to his equity? Did it double? No, he is now guaranteed $6,000 and has a 67% chance of winning another $6,000, i.e. his equity is now $10,000.
His stack is twice as big but his equity only increased from $7,000 to $10,000. The player who was knocked out and lost all his chips did not lose all his equity; it went from $7,000 to $3,000.
And the player who was not even involved in the pot increased his equity from $6,000 to $7,000. So, the same stack size actually increases in equity as other players are knocked out.
Suppose you are down to five players in a tournament and you all want to make a fair deal. How do you do it? As I showed above it is complex even with three players, so how about five?
I would recommend a method called ICM, Independent Chip Model. It is a method for assessing tournament players’ equity based on their stack sizes and tournament payout structures.
Check this website (http://www.icmpoker.com/icmcalculator/) and play around with it—it is very interesting.
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