What does Ciaffone mean by overlay?

[BobboFitos]

mason solid post. but, and yeah i'm being nitpicky:

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Say a site offers a $100 guarantee prize pool on a $1+0 buyin. If 100 people enter, your share of the prize pool is 1%, exactly what you contributed. If only 50 people enter, you have a 2% share of the prize pool but only contributed 1%, thus you have a 1% overlay.

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this is incorrect

[mason55]

hahahah maybe i'll just keep my mouth shut, but what is incorrect about it? now i'm curious as this was the way I always understood it.

[BobboFitos]

[ QUOTE ]
hahahah maybe i'll just keep my mouth shut, but what is incorrect about it? now i'm curious as this was the way I always understood it.

[/ QUOTE ]


Basically:
If you are paying 1dollar into a 1dollar tournament with a gauruntee prize pool of 100$, and there are 100 players, it's break-even. 100/100 = 1, you're paying 1, it's 1:1
Now, 50 players die, (I had a bad day) and the tourney is still gaurunteed 100 payout. 100/50 = 2, you're paying 1, now 2:1. So you're getting double value, or 100%, not 1%.

I believe a 1% edge would be 99 players with 1 free dollar.

[mason55]

Ehhh you're right. I was still thinking prize pool equity when I said that. Your share of the pool goes from 1% to 2%.