Chips Change Value. So What?

[rgschackelford]

It's me again. I'll try to use paragraphs this time. [img]/images/graemlins/smile.gif[/img]

I understand how chips change value and why, with the prize structure and everything. But the one thing I have a hard time with is what does this mean in terms how I should treat how I play? Of course I want to push all of my decent edges, and I'm trying to get what I can out of my good hands, and lose a little as I can whenever I lose, but what does the changing value of chips mean to my accumulation of them? I, preferably, want to pick up as many chips as I can get (most preferably, all the chips in play!). Could someone tell me how this changes my strategy? I know this is in Sklansky's Tournament book, but I'm just not grasping the idea completely.

Thank you all again, and I'm sorry if this is a no-brainer and I should be ostracized for asking it, but would someone please throw me a bone here?

Rusty G. Schackelford

[marrek]

As i understand the concept, losing 10,000 chips is much worse in magnitude than gaining 10,000 chips is good, so you dont' what to push your small edges for large sums.

Just to be clear, at the begining of a $10,000 buy in where you get 10,000 chips, each chip is worth $1. But later when you need to get all, say in the case of the WSOP, all 30,000,000 million chips to winn $5,000,000, each chip is only worth 16 cents.

So now say there are 5 players left and each chip is worth 37 cents ( a guess-timate). So with each chip you lose, you are losing 37 cents equity. But as you gain chips, you move the value of each chip closer to 16 cents, which is obvioiusly less than the chips you lose at 37 cents.

So, you dont' want to push small edges because the value differnce of the chips you lose negates some of the edge!

For example, your a 55% - 45% favorite in a hand and know it, and are considering calling 1,000,000 chips at 1:1 odds. If each chip was worth $1, your equity in the pot would be 55/100 win $1,000,000 + 45/100 lose $1,000,000 = $100,000.

But if each chip you lose is worth 37 cents and each chip you win is worth 30 cents, then your equity in the same situation becomes
55/100 win 300,000 + 45/100 lose 370,000 = -$1500 a negative expectation!!

The problem is knowing exactly what value the chips have at a given time.

Hope this helps

Marrek

[Bigdaddydvo]

Great post, helped me.

[tdp]

Great explaination,thanks.I always thought that was the dumbest chapter in TPFAP,now it makes sense.

[DireWolf]

[ QUOTE ]
Just to be clear, at the begining of a $10,000 buy in where you get 10,000 chips, each chip is worth $1. But later when you need to get all, say in the case of the WSOP, all 30,000,000 million chips to winn $5,000,000, each chip is only worth 16 cents.


[/ QUOTE ]

I don't understand this.

[LethalRose]

My understanding was that at the beginning of an MTT you're chips are worth no money. and only once you get close to the money do your chips begin to have actual monetary value and passing up small edges is +EV

[etotheipi]

The chips are worth even money at the beginning of the tournament, so your CEV = $EV. Thus if you have a small edge, it's correct to take it if you can equate it to +CEV.

Later in a tournament near the final table, +CEV does not necessarily mean +$EV, for which Sklansky has a great (though extreme) example in TPFAP -- 5 people left, steep payout structure, you're a super-shortstack, and 3 even-stacked players go all in against each other. You look down to AA. You're CEV is obviously positive here but its more +$EV to fold and let people 2 people go broke ahead of you.

Eto...

[marrek]

[ QUOTE ]
[ QUOTE ]
Just to be clear, at the begining of a $10,000 buy in where you get 10,000 chips, each chip is worth $1. But later when you need to get all, say in the case of the WSOP, all 30,000,000 million chips to winn $5,000,000, each chip is only worth 16 cents.


[/ QUOTE ]

I don't understand this.

[/ QUOTE ]

If you buy into a tournament for $10,000 and recieve 10,000 chips, each chip is worth $1. Another way to think of it is, if you won your way into the WSOP and someone wanted to buy your chips before a hand is dealt, what should you sell them for? $10,000 is fair right? because thats whaht their worth ( ignoring other factors like availabilty of entry and your skill level).

Now, in order to win the $5,000,000 1st place prize, you need to get all 30,000,000 chips and then trade them for the $5 million in cash. So, now each chip is only worth 16 cents ( 5,000,000/30,000,000). So as you move throughout the tournament each chip changes value.

So as you collect more chips, each subsequent chip is worth less to YOU, because you move closer to 30 million chips.

Another extreme example is if you are at the final table of the WSOP adn there are 5 players left.
Greg Raymer 25,000,000 chips
Phil Hellmuth 1,999,999 chips
Amir Vahidi 1,000,000 chips
Gus Hanson 1,000,000 chips
YOU 1 chip

Because the payout is
1st 5.0 mil
2nd 3.5 mil
3rd 2.5 mil
4th 1.5 mil
5th 1.0 mil

Your 1 chip is obviously worth at least 1 million dollars plus the chance of you moving up to 1.5 million mulitplied by the difference. ( About $1,001,000)

Since Greg has 25 million chips, but can only win a maximum of $5 million, his chips are worth about 17 cents each. (he hasn't won the tournament yet, so they can't be worth a total of $5,000,000. But he has a super strong chance of winning, so they are probably worth about 4.8 million. If you were in his shoes, what would you sell his chips for?
A total of $4 mil, $4.2, $4.8? 4.8 million/25 million chips = 19.2 cents per chip.

So, everyones chips are worth different amounts, depending on the situation.

marrek