Posts Tagged ‘Mason Malmuth’

Event 4 was a $300 NLHE tournament that allowed one $300 rebuy and one $3000 add-on. The initial $300 bought 2000 chips, the rebuy bought 2000 chips anytime during the first hour that you had 2000 chips or fewer, and the add-on bought $2500 chips at the end of first hour.

There are two seminal books that address the value of tournament chips: David Sklansky’s Tournament Poker for Advanced Players and Mason Malmuth’s Gambling Theory and Other Topics. I haven’t read Malmuth’s book, but my understanding is that both make a similar argument that this value is non-linear. Another words, your last chip is worth more than your second to last chip is worth more than your third to last chip etc. Each chip you add to your stack increases the value of your stack, but by less than the preceeding chip did. So if you have on chip worth x, and you double up, your stack is worth marginally less than 2x. And if you double again, your stack will not be worth 4x. This is because survival has value in a tournament where all of the prize pool is not paid to the winner.  Read the complete post...