Adding on to kill the overlay...

[meow_meow]

Empire runs a $5k guaranteed $50+5 with rebuys every afternoon. Today, there were 40 players, and at the break a total of 17 rebuys and 29 players remaining.

Obviously, even if everyone adds on, the prize pool is still going to be 5k, so the addon is basically going into Empire's pocket (never mind that they rake it as well) - not that I'm complaining, because this means guaranteed overlay.

Anyway, obviously the remaining players as a group are best served by no one adding on. However, each individual player, especially shorter stacks, increases their EV by adding (correct?).

I guess it's a bit like the prisoners dilemma, except that here cooperation isn't advantageous for every player (i.e. very short stacks are better off if everyone adds than if no-one does.)

FWIW, 21 of 29 players added on.

[joeboe2001]

I am not seeing how players are "best served" by no one adding on?

Big stacks are, since they maintain their advantage without putting more money in.

Short stacks are able to catch up, usually at a bargain price (add ons usually give you more chips for your money than your original buy in or rebuys).

Somewhere in the middle there is probably a point where one's stack is big enough so that the add on is insignificant and can safely be foregone.

Is there a point here?

[Pat Southern]

Its a lot like a collusive oligopoly. Although each player would be better off if everyone colluded and chose not to addon, thus shifting to close to a monopoly equilibruim (the chips would have the greatest value), by cheating the rest of the colluders through adding on, the player increases his $EV (he gets to buy chips at a cost less than they are worth due to the overlay). Because each player has an incentive to cheat, each individual is trying to increase his own $EV, the collusive oligopoly fails and returns to oligopoly equilibrium.