Thursday, September 27, 2012

20 thoughts on skill vs. chance in poker, part 18: The relationship between level of stakes and degree of chance

<-- Part 17: Why does poker need randomness?

In addition to the practical reasons that poker needs randomness as discussed in the previous thought, many players will say that another reason that poker "needs" randomness is for various reasons of attracting people to the game. This isn't quite a need, but it's certainly a desired property, but not only for the obvious reason of allowing weak players to overrate their skills.

To a skilled poker player, yes, the most blatant upside of poker having randomness is that it obfuscates the relative skill of the players. If a player were hoping to ascertain his skill ranking within a group of players solely by observing game results, a lot of volume would have to be put in before the statistics confidently revealed who the best players were. The winning players will make money over this period and, especially at the lower levels, one's opponents are also otherwise likely to misevaluate their own skills due to a long list of foibles of the human mind. Meanwhile, serious players who study game strategy away from the table are more readily able to quickly assess the skill ranking within a group of players by observing the mistakes that the players make, rather than merely waiting for the results to converge over time.

The more subtle marketing advantage of poker's randomness is that it leads towards bigger prize pools, which helps attract mainstream attention, make television coverage more exciting, and creates more higher-utility interactions between serious players and casual players. The core idea here is as follows: assuming that the required expected value for a winning player were held constant, the higher the influence of chance in a game, the higher the stakes must be for the flow of money from weaker to stronger players to be of this desired size.

For example, if poker had less chance, then, for any type of poker tournament, the buyin need not be as high as $10,000 or $1,000,000 to sufficiently incentivize the best players in the world to compete. If poker tournaments were usually won by the best player in the field, then the $10,000 World Series of Poker Main Event would have a seven-digit expected value and an absurdly high ROI for the world's best player. Games such as Scrabble and Magic: the Gathering, where the influence of chance over skill is usually smaller (over the timescale of, say, a weekend) are typically played with prize pools several orders of magnitude smaller than those that are common in poker, which perhaps contributes to them being less interesting for onlookers and curious would-be players. If poker had less chance in its outcomes, then the pull of the economic equilibrium would reduce the buyin size of poker tournaments until the best players' expected values were closer to what they are in the current poker market. This is a concern not only for the incentivizing of players, but also in allowing for a stable poker economy; even if all players had rational assessments of their abilities, a faster expected flow of money between weaker and stronger players would cut through the entertainment budgets of the casual players more quickly.

This isn't to say that exciting, big-money poker events need to be marketed alongside gambling as they so often are. The fact that the poker which reaches the television airwaves and mainstream consciousness is so often taking place in casinos and cut together to highlight the emotions and swings of the players is, in my opinion, a significant detrimental factor in cementing the ignorant onlooker's misperceptions of poker as homogeneous with traditional gambling. Poker could be presented to the public with a more toned-down, analytical, competitive framing. The big-dollar appeal would still attract interest even if the game were not conflated with gambling. A Scrabble tournament with a million-dollar first prize would get plenty of attention. For better or for worse, people are compelled to follow games which award big prizes.

All that aside, an academic approach to analyzing poker ends up largely ignoring these potentially financially-lucrative facts about poker's appeal and ability to produce consistent winnings for its best players. From the broader perspective of game design, as noted by Richard Garfield in his lecture, an important advantage of using chance in games is that it allows a wider set of players to enjoy playing the game with each other. Deterministic games such as chess are rarely fun when played between people of vastly different abilities, but poker can be entertaining to all parties involved even when their skills greatly vary. This isn't because the weaker players are necessarily interested in gambling or that they necessarily enjoy games of chance in general. It's because a game with random elements will usually be more dynamic and interesting in its gameplay than a deterministic game. Not only might the weaker player win sometimes, but, even when they lose, they won't always be losing in the same way each time they play.

Even if the money were entirely taken out of poker, it would still be an excellent game for social gameplay. That any fundamentally mathematics-based game could appeal to as broad an audience as poker does today is a testament to the compelling diversity of play that its randomness generates. Poker manages to be at just about the sweet spot of balance between skill and chance, both for casual play and for competitive play, and that should not be taken for granted. Taking the chance out of poker, if it were even possible to do so, might be hurt the game.

Part 19: The German "predominantly chance" study -->

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