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View Full Version : Badly Formulated Question: Overall Variance vs SNG Structure.


parappa
09-05-2004, 04:19 AM
I'm going to do my best. I think this issue gets hinted at from time to time on the single table board, but ignored because either 1) the answer is obvious 2) it's seen as the mournful lament of a player on tilt (which is probably true) or 3) no one knows.

Anyhow, here's my best formulation:

It seems to be true that a good player has a positive expectation over bad players at the low limits but that low limit ring games have a high variance because of the way in which low limit players play. So, a good player can be expected to win at a certain rate, but can expect bigger fluctuations in his bankroll than a player with the same advatange who is playing in a lower variance game. To achieve the same results in a higher variance game a player's bankroll must be larger in order to withstand increased fluctuations. But, if his bankroll is long enough he will withstand the fluctuations and ultimately have a positive expectation.

First attempt to ask the question: Can't certain SNG structures invoke the other half of that idea? If his bankroll is too short, he may often at some point go broke before his results begin to conform to his expectation. And since SNGs are independent trials, doesn't it make more sense to think of SNGs in terms of a series of independent "lifetimes" in which a player could possibly play on a series of short bankrolls, but his results could never "even out" over time? In the context of SNGs, it doesn't matter if his chip count over all the SNGs evens out, it matters how many times his bankroll gets to zero chips, because when that happens, he's out, and the cards breaking even later won't rescue that result.

Next Try: Take, for instance, an SNG in which each player starts with 100 chips and blinds start at 10/20. Does a good player actually have the same positive expectation over his opponents that he would in an adequately bankrolled ring game? He may have the same theoretical positive chip expectation against a group of bad players over a long series of trials, but an SNG is an independent series of short run trials. If a player ever loses more than 100 chips, he's out. While with an unlimited bankroll he'd win, but doesn't the variance of typical low-limit play, coupled with a series of artificially short bankrolls and the "go broke-you're out" structure make it just as likely that he will hit zero chips and lose, over and over again, until his results become just slightly better than random, his ability to take higher EV bets with his cards "watered down" (for lack of a better term)?

In this situation, can't increased variance actually decrease overall profitability? If so, wouldn't there have to be a combination of SNG structure and player profiles which must be inherently unprofitable?

Next attempt: Chip EV and Tournament EV are not always the same thing. Mustn't there be a threshold where variance, although not affecting chip EV over all the hands in all the tournaments, can, due to the independent nature of the "go broke, you're out" nature of SNGs, reduce Tournament EV from positive to negative over many tournaments?

Next attempt: It is commonly said that your variance will be higher at party but that if you are playing your cards better than your opponents, your results will even out over time. But does this actually make sense? I understand that your "lifetime chip count" will even out over time, but I don't see why this assumption applies to a series of tournament results. I think that if the same phenomenon is true, it needs a stronger explanation than the one relying on chip variance that makes sense in ring games.

Anyhow, that's three tries at it. Does anyone know the answer to this? Please tell me if you do; I really don't know how to even think about it. /images/graemlins/smile.gif

And if the way that I've put the question doesn't make any sense, please tell me that and I'll try again. /images/graemlins/smile.gif

sirtemple
09-06-2004, 04:02 PM
The question you posed makes sense to me, however I have no way of answering it. However, I am also very interrested in the answer. I didn't think of it in quite those terms( i.e. not as scientific), but I have also thought that SNGs are too luck dependant. Since many players will go all-in w/ weak holdings, they force you to take many 60/40 or even 70/30 situations. In each one you are a favorite, but with 9 or 10 players, one will hit his long shot and cripple/ break you.

Jason

LinusKS
09-06-2004, 10:01 PM
I think there are games where the variance is high enough that better players are better off not playing them.

In the first place, if your bankroll is limited, you need to manage your ROR (risk of ruin) so you don't risk going broke - no matter how good you are.

In the second place, even if your bankroll is big enough for the high-variance game, you could be better off playing a low-variance game for higher stakes.

In the third place (and this is probably the controversial part) I think there are games where skill becomes relatively less important - in other words, bad players can nullify much of a better player's skill advantage, even though they're playing badly.

In one of his books, for example, Sklansky talks about how going all-in is in the interests of bad players. Conversely, if you're a good player, going all-in may not be in your best interests. Not only that, it's probably not in your interest for bad players to be going all-in around you. At least not if you want to play a hand once in a while.

This may be true even if you're guaranteed to be the favorite every single time.

For example, if you go all-in two times, where you're a 60/40 favorite each time, you're only going to survive those confrontations a little better than one-third of the time. Make it three, and you're down to 21.6%.

Worse than that, though - the kinds of skills that separate the wheat from the chaff - running a good bluff, or reading an opponent's hand - become irrelevant in that kind of game.

If you combine a game with a lot of bad players who go all-in all the time, with a rapidly increasing blind structure, the variance is bound to be very high, and the skill-to-luck ratio very low.

To take an extreme example - if you were heads-up with someone with T4000 each, and the blinds were 800/1600, skill would be relatively unimportant.
If a bad player knew nothing more than to go all-in every single time, he probably wouldn't go too far wrong.

Yes, an especially good player would probably still come out ahead in the long run, but the long run would tend to be very long, and the amount of his advantage would be small.

I think that may be an example of where the 2+2 truisms - that variance doesn't really matter, and that you should play the worst players you can find - may be dead wrong.

parappa
09-07-2004, 06:39 AM
At the cost of making this post make even less sense, I must point out that I've failed to outline the problem adequately, for it is your tournament placings rather than your chip count that cause you to win/lose money so I'm not presenting the question completely fairly as written.

But since the more I think about it, the more confused I become, it might not matter /images/graemlins/mad.gif

PrayingMantis
09-07-2004, 07:13 AM
I believe you've posted some very interesting questions.

Similar questions were actually discussed a few times, but I'll try to think about it again.

[ QUOTE ]
First attempt to ask the question: Can't certain SNG structures invoke the other half of that idea? If his bankroll is too short, he may often at some point go broke before his results begin to conform to his expectation. And since SNGs are independent trials, doesn't it make more sense to think of SNGs in terms of a series of independent "lifetimes" in which a player could possibly play on a series of short bankrolls, but his results could never "even out" over time? In the context of SNGs, it doesn't matter if his chip count over all the SNGs evens out, it matters how many times his bankroll gets to zero chips, because when that happens, he's out, and the cards breaking even later won't rescue that result.

[/ QUOTE ]

You are right in seeing SNGs as a series of "independent lifetime", as any tournament is. But since you can play many of them, the meaning of "one life time" is not clear, and not very true. You can enter another game, and make +EV (CEV or $EV, it doesn't matter now) decisions, and so on again and again, and your resuls WILL even out, and if you have an edge and are a better player, you will win money on the long run. It is very simple, in this sense.

[ QUOTE ]
Next Try: Take, for instance, an SNG in which each player starts with 100 chips and blinds start at 10/20. Does a good player actually have the same positive expectation over his opponents that he would in an adequately bankrolled ring game? He may have the same theoretical positive chip expectation against a group of bad players over a long series of trials, but an SNG is an independent series of short run trials. If a player ever loses more than 100 chips, he's out. While with an unlimited bankroll he'd win, but doesn't the variance of typical low-limit play, coupled with a series of artificially short bankrolls and the "go broke-you're out" structure make it just as likely that he will hit zero chips and lose, over and over again, until his results become just slightly better than random, his ability to take higher EV bets with his cards "watered down" (for lack of a better term)?

[/ QUOTE ]

Sure, we could think of structures in which the advantage of the better player is "smaller" (actually, most of short-handed, endgame situations in party high buy-in SNGs are like this). But still, a better player, by definition, has an advanage, and every time he's all-in with a small advantage against an opponent, *and it's a +$EV spot for him*, he's "making money". What counts is the long term, as in any area of poker. There is nothing special here (La Brujita had brought up a very similar question, about structures that are bad for good players. It was a few months ago).

The meaning of "bad for good players", is that the long-run is longer, since your edge is smaller, nothing more. But this is true for high-limit ring game (think 100/200, or whatever). It's really very similar. Very small edge, maybe, for the best players, but enough to win big money on the long run. However, they need a HUGE bankroll.

[ QUOTE ]
Next attempt: Chip EV and Tournament EV are not always the same thing. Mustn't there be a threshold where variance, although not affecting chip EV over all the hands in all the tournaments, can, due to the independent nature of the "go broke, you're out" nature of SNGs, reduce Tournament EV from positive to negative over many tournaments?

[/ QUOTE ]

No, what you say here does not make sense, IMO, if we have a common understanding of what is EV and what is "edge" in poker. However, IF you mean that in a specific tournament all opponents are equally skilled - then it's not a question of structure, or blinds, or anything. Playing this tournament is simply -$EV for every one of them, because of the vig they are paying. If there was no vig, it was still zero EV proposition. Still not a very good offer... /images/graemlins/grin.gif

[ QUOTE ]
Next attempt: It is commonly said that your variance will be higher at party but that if you are playing your cards better than your opponents, your results will even out over time. But does this actually make sense? I understand that your "lifetime chip count" will even out over time, but I don't see why this assumption applies to a series of tournament results.

[/ QUOTE ]

Why don't you see this? Consider every SNG as a hand in a ring game. In a tourney you make +$EV or -$EV decisions. If you'll keep making +$EV decisions, against weaker opponents, then you have a long term advantage, regaedless of variance (in this aspect).

[ QUOTE ]
that's three tries at it. Does anyone know the answer to this?

[/ QUOTE ]

I don't know if what I wrote is the "answer", but these are some of my thoughts on these subjects.

parappa
09-07-2004, 07:36 AM
Thanks very much for the replies. This bit of Praying Mantis' reply has produced the requisite "aha" moment for me:

[ QUOTE ]
[ QUOTE ]
Next attempt: It is commonly said that your variance will be higher at party but that if you are playing your cards better than your opponents, your results will even out over time. But does this actually make sense? I understand that your "lifetime chip count" will even out over time, but I don't see why this assumption applies to a series of tournament results.

[/ QUOTE ]

Why don't you see this? Consider every SNG as a hand in a ring game. In a tourney you make +$EV or -$EV decisions. If you'll keep making +$EV decisions, against weaker opponents, then you have a long term advantage, regaedless of variance (in this aspect).

[/ QUOTE ]

For some reason, thinking of an SNG as a unit (like a hand in a ring game) rather than a collection of hands (like a session of ring game hands) enables me to fit it into the standard ideas of variance and expectation being separate.