opportunity cost in sng's

[stillbr]

Is there such a thing? has this been discussed before?

For example--
you have some type of draw where the odds are there or your have very good implied odds, but the upside of holding on to chips is better than drawing?

example..I'm delt JT in level 2 and limp in in LP. I have 750 after I limp in.

5 to the flop unraised. (150)
78A
EP bets out 80, there is a call, fold, call. I close the action. Lets assume I know there will be a huge bet on the turn that I cant call unless I hit a 9. Lets also assume I can get atlease 1 person to get me all in if I do hit.

[jt1]

you have odds to chase if you are closing the action and are sure that you'll get paid off. It's still early..

[stillbr]

If my example is an easy call, lets come up with a better situation to discuss opportunity cost. Maybe a later level. Somthing where I have odds to chase, but would rather holdon to chips.

[45suited]

I fail to see how it's an easy call in your example.

First, you never KNOW that you will be paid off.

Second, after the flop bet and two callers, you pretty much know that you're drawing to a 4 outer.

You're just bleeding chips here bro. From the pre-flop call to the flop call.

Your stack isn't big enough to play this way in SNGs. Fold pre-flop. Fold the flop.

[stillbr]

[ QUOTE ]
If my example is an easy call,

[/ QUOTE ]

AKA implied odds.

[A_PLUS]

I dont remember ever reading the term opportunity cost before (and I am an econ dork, so it would stick out).

But I think that it is pretty much the underlying theory behind the fold early-push late philosophy. Also, it was the toughest part about turning a MTT-cash game into a good SNG game.

[jeffraider]

Spending 80 chips on a 4-outer with one to come is poop. I'll save 10% of my stack for later.

[Gramps]

Yeah, there's been some threads on it in the past, I remember a few in the MTT forum a little over a year back (I was making some arguments in that regard and used the term too as an ex-econ major).

Bascially, there's times in an SNG (or any tournament) where you are given a slight +CEV opportunity for all your chips. The problem is that of the times you lose and are knocked out, you forgo any future shots at +CEV opportunities. If you are a skilled player playing against many bad/reckless opponents (for example), it's likely that on average you will be presented with numerous, much higher +cev opportunities later on. Or, especially in the lower buy-in SNGs, waiting to go to war can have added +$EV value b/c you can get in the money often enough just by letting everyone else knock heads.

Specific example, in a Party SNG format, on the first hand of an SNG would to take a 51/49 all-in? Why not? The opportuniy cost of forgone future chances to get your chips in in a much better spot (for part or all of your chips) is too great - at least for the more skilled, non-donk players.

FWIW, even though I've used opportunity cost myself, it's probably not the most precise term (I think in economic terms, you're 100% of the time forgoeing something else, where here you're only doing it the % of the time you're knocked out). Maybe potential opportunity cost or something of that nature would be more apt a term.

I think the problem relates to Harrington's inflection point theory (discussed in HOHE II). In a tournament when your stack is down to around 10 times bb+sb+antes (=initial pot), drawing hands are no longer as valuable, since the value of being first in the pot increases dramatically, and when that ratio is below 5, hands will seldom go to showdown without someone being all-in.
Ok, that was a horrible explanation... the point is, that you need the extra chips to steal blinds and scare people out of the pot... so putting in 20% of your chips on a draw will, regardless of potodds at some point become a mistake, since you not only loose your chips but also your folding equity... In that way you could describe the lost folding equity as an opportunity cost that you pay on top of the lost chips.