Is this deal fair?

[Bozeman]

One can get a much tighter upper limit by assuming the big stack gets 2nd everytime he doesn't get first, which leads to 180/268*5220+88/268*3480=4650, so anything more than this (like the actual deal) obviously favors the big stack. The Malmuth method also provides a lower bound (favors small stacks) of $4559, so regardless of what you think of the random walk model, the result is close to $4593.

Craig

[Ignatius]

One can get a much tighter upper limit by assuming the big stack gets 2nd everytime he doesn't get first
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You're right. However, your hypothetical payout schedule of 5220/3480/3480 then doesn't add up to the original prize pool and basically favors all stacks, so this method only provides an additional (and for big stacks more accurate) upper bound but it won't provide you with a split for all stacks, so it can only be used in addition with another model. This is no problem for the actual deal, as 2nd and 3rd happen to be identical and their payout can be derived from the 1st.
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In a refined model, the fairness intervals could then be computed as [min(A,B),min(C,max(A,B))], where A would be the all-to-the-winner equity (give anybody last place money and split the rest according to chip-count), B the flat equity (leave 1st place as it is and even out all other positions) and C the additional upper bound gained by assuming that all non-winners get 2nd place money.

[M.B.E.]

[ QUOTE ]
Like I said I'm no expert in this field, but if I'm the guy with that many chips, I'm not taking any deal that doesn't give me at least full winner's share at this stage.

[/ QUOTE ]
There's nothing wrong with turning down a deal (Negreanu wrote a great column once about why he never makes tournament deals), but think about why you're doing it. If you understand what EV is, you should realize that when you're the chip leader, there is always some deal which gives you less than first-prize money, but is higher EV for you than playing out the tournament, even if you are far and away the most skilful player.