Not being aware of your surroundings can be costly
In the NFL, coaches and players often draw criticism for making the wrong choice in a situation where the right choice seems obvious. Maybe it’s a player failing to run out of bounds to stop the clock when time is of the essence. Or maybe it’s a coach having his team kick an extra point when it would make more sense to attempt a two-point conversion.
Game theory is defined as the “analysis of strategies for dealing with competitive situations where the outcome of a participant’s choice of action depends critically on the actions of other participants.” While game theory applies to most games and sports, perhaps its most obvious application is in card games.
Take poker, for example. At the Mid-States Poker Tour Grand Falls $1,100 Main Event in Sioux Falls, S.D., this summer, just seven players remained when Swadeep Mishra lost a big hand and was left with 37,000 in chips. To make matters worse, the blinds were 10,000-20,000 with a 3,000 ante, and Mishra was the big blind in the next hand.
This was where Mishra failed to recognize the game theory optimal (GTO) strategy.
In the subsequent hand, Ahmed Taleb, sitting in early position, moved all in for 323,000 holding 8h 8d and J.W. Nelson, who was next to act, made the call with As 10c. Action folded around to Mishra in the big blind, and he looked down at 8c 2h.
What would you have done in this spot?
Mishra, who had more than half his stack in the big blind, ended up calling off the rest of his stack when he should’ve folded.
Here’s why: Mishra’s stack of less than two big blinds wasn’t worth much, meaning his chances of winning the tournament were slim. Odds were that he’d bust out in seventh place for $7,801. However, by Taleb moving all in and Nelson calling, Mishra had an opportunity to ladder up to sixth place, which paid $9,361. All he had to do for a shot at an extra $1,560 was to fold and hope Taleb busted.
Granted, Mishra would have been left with only 16,000 in chips, but at that point in the tournament, there really wasn’t much difference between having 16,000 or 37,000 or even 100,000 in chips. Mishra would have been much better off folding and going for the extra cash.
Instead, he called off his stack with a terrible hand, meaning that if both he and Taleb busted to Nelson, Taleb would have finished in sixth place because he had the bigger chip stack.
As it turned out, folding wouldn’t have helped Mishra, as Taleb doubled after the board ran out 2c Jd 7s 4h Qh. In fact, this hand helped set Taleb on a course to victory, as he ultimately won the tournament for $54,089.
Results aside, it’s imperative to always be aware of game situations and act accordingly. If you don’t, you could be costing yourself some cold hard cash.