Week in Review #14 June 22nd- June 28th

It's time some Game Theory

I went long on my thoughts about the Millionaire Maker heads-up snafu in POTD #70 and on social media, including posting this poll, which was to some degree a survey about a version of an ultimatum game¹. In this poll, I asked “If you were James, how much money would you need to take a dive?” and the overwhelming reply was that they’d need 500k+, with others suggesting as much as $999k. I was surprised by the poll results and the responses, so I am going to use this space to dive into my thoughts a little more.

When they get heads up, Jesse has 30.7M chips and James has 269.3M chips. First place is $1,255,180 and second is $1,012,320. ICM would say James wins 89.8% of the time and his stack is worth $1,230,327.33, while Jesse’s stack is worth $1,037,172.67. Jesse does get the button the first hand, which means ICM is slightly undervaluing his stack, but it is close enough for our purposes. However, if Jesse wins the tournament, he gets an extra million dollars, which is a lot of money, but given he only has a 10.2% chance to win the tournament, it only increases the value of his stack to $1,139,506.01.

The most common response I got went something like this: James has all the leverage; he should play hardball. If James says he will throw the match if Jesse pays him $800k, then Jesse will cash for $2,255,180 and net $1,455,180, for $300k more than his ICM value. Jesse would be an idiot to say no. What frustrated me about this response is that it ignores a key element to this dilemma: James and Jesse have symmetrical incentives. If you think James has “all the leverage,” you’re ignoring that Jesse also has “all the leverage.” They want to cooperate so that a million dollars appears from the sky; once you agree to a deal, it does not matter that Jesse is technically the player who wins the extra million. They win a million dollars combined, which they can split amongst themselves. If Jesse offered James $300k to throw the match, James would have cashed for $1,312,320, which is $57k more than first place money and $82k more than his ICM value. James would be an idiot to say no. So where should they settle?

As we’ve learned over the past couple of days, they are taking a significant risk, so James should be compensated for his risk. I don’t think he should accept only $1 more than the ICM value of his stack. I think a reasonable floor for how much James should accept is more than first place in the tournament, but how much more? This game is not a classic ultimatum game because there is no mechanism that gives one player position. In a classic ultimatum game, player A makes an offer and player B can accept or reject it. In this case, that would mean Jesse would offer James $1 more than his ICM value, and vice-versa, if they were rational-economic men and did not want to spite reject a lowball offer they’d both say yes. Picking a midpoint and splitting it down the middle does seem like a fair middle ground, but whoever is the best at playing hardball could almost certainly squeeze out more. The range of what either party is willintg to accept is so wide that there is no equillibrium solution to this problem; both parties want a deal to be made, whoever is the best at playing hardball will get paid the most.

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Testimonials

POTD subscriber and author of Silver Bulletin, Nate Silver was on the GTOLab podcast and praised Punt of the Day. I’ve embedded the clip with the time stamp of Nate’s praise below, but you should listen to the whole podcast.

Additional Sims For Premium Subscribers

Premium subscribers get the raw files of sims I used to write my POTDs, sims that are more accurate and appropriate than equivalent sims in the big public libraries, videos of me walking through the sims, and a text summary of how I ran the sims. This week I uploaded:

• A PIO Sim using the actual bet sizes used in the hand

• Two PIO Sims using unequal stack preflop ranges and different flop sizes

• A PIO Sim using minraise-preflop ranges that gives a very different output than the GTOw equivalent

• Two PIO ICM sims

Additional Analysis for Premium Subscribers

Everyday Premium Subscribers get an extra bit of analysis not included on Substack. Today I’ll share #onemorething I posted about POTD #66. Where I wrote about what the third player in the hand, Stephen Chidwick should do.

There is another player in the hand i've barely talked about Stephen Chidwick. I think once he calls the flop and Richard checkraises and Dylan calls the checkraise. Stevie needs to fold. Top pair with a nut gutshot and a backdoor flush draw is more than enough to stack off for chips here, but given Stevie starts the hand in a distant third place, any chance he might ladder is too valuable to give up. He was rewarded for this flop fold and earned $430k when Richard busted.

The question I have is, should he have potted the flop the first time or check jammed over Dylan's bet. I don't think he should have led the flop he has a hand that turns pretty concentrated equity— when he improves it will often be to the nuts, trips with second kicker or top two and 1/4 of the time he will add a flush draw to those hands; more than enough to get all in with on the turn. So I think he's better off checking and seeing what Richard and Dylan do on the flop. However, once Dylan bets, I think Stevie should shove the flop. He has some fold equity, he will always get it in okay, he can get Richard to fold better hands or other T7 combos and Stevie will need to stack off on most turns anyways. In this exact hand things shook out perfectly and he laddered, but I think check-shoving the flop is best.

Media

There were no media appearances by me this week, which means I get to indulge myself and answer the prompt created by the New York Times this week: listing my top 10 movies of the millennium thus far. My belief is that a good list is personal. No one wants to see a top-10 movie list that is The Godfather, Citizen Kane, Vertigo, etc. All great movies, but you are a person, not the canon personified. Your list should have some personality. As a tiebreaker, I gave preference to movies I saw in theatres. The movies listed below are listed chronologically.²

Mulholland Drive (2001) - One of the few movies on the list that I have not seen in theatres. I took a David Lynch class in university and watched in a tiny classroom on a hot day with no air conditioning. A perfect movie.

Caché (2005) - I wrote about this movie when I was blogging about movies; I assume my review stinks and I would be embarrassed to reread it. I also tweeted at Roger Ebert about Caché and he replied to me, so that was fun. I’ve played poker with a lot of austere Austrians, but none who have savagely ripped apart well-meaning white liberal guilt like Haneke does in Caché.

No Country for Old Men (2007) - The least Jewish Coen Brothers movie ever made. Watching it in a packed theatre with everyone on the edge of their seat was one of the formative moviegoing experiences of my life.

The Tree of Life (2011) - I saw it in theatres and it left me speechless. At the time I did not know we were going to get several more Malick movies; it felt like a miracle, and still does.

A Separation (2011) - As I’ve seen more Farhadi movies and gotten used to his tricks, I am not sure how I’d feel about A Separation if I rewatched it. Then I realized his “tricks” are creating three-dimensional human characters, putting them in moral vices, and shifting the audience's perspective in such a way that you shift loyalties with every character in the movie before empathizing with all of them. Even his alleged plagiarism just makes him a more interesting director to me.

The Act of Killing (2012) - I saw this in a mostly empty theater and could not believe what I was watching. How Joshua Oppenheimer convinced these aging génocidaires to participate in this bizarre project is beyond me, but the detail that might have affected me the most was that the end credits that needed to anonymize the names of the entire cast and crew who literally put their life on the line to help make the film and were likely still in danger.

The Wolf of Wall Street (2013) - A rollicking movie about the worst people in the world. Since the release of this movie, the world has become even more financialized, and the big winners have been largely criminals and scumbags. If you’d like further proof of this movie’s accurate portraiture of horrible people, during the Florida Panthers Stanley Cup parade both Sam Bennett and Matthew Tkachuk quoted DiCaprio’s Jordan Belfort as if he were a personal hero.

Everybody Wants Some!! (2016) - Richard Linklater is one of the few artists that is also a jock. I love that this movie about a guy straddling both worlds also straddles both worlds. I don’t think I’ve ever seen a better movie about male camaraderie. It’s a movie I could rewatch a million times and never get tired of.

Zama (2017) - I saw a screening of this at the Toronto International Film Festival at 10 AM. It is a dreamy movie and I nodded off for a couple minutes in the middle. Then in the Q&A afterwards, Lucretia Martel said she didn’t care if people fell asleep during the movie, and she’s fallen asleep while watching classics before. Happy to join the club.

Phantom Thread (2017) - I am not even sure if this is my favourite PTA movie, but it’s a movie I think about every single time I get sick. It’s also a movie that pokes fun at a guy who spends his whole life obsessing over a stupid craft, which makes him impossible to be around. I can relate.

If Beale Street Could Talk (2018) - There has been a lot of bad art that focuses on the victims of the carceral state. They foreground the “dramatic” parts of a story: arrests, courtroom proceedings, jail time. If Beale Street Could Talk backgrounds those parts of the story to tell a romantic and family story that says the reason a wrongful arrest is so heartbreaking is because this is what it is taking away.

1. with some prisoner’s dilemma elements thrown in

2. I miscounted and actually wrote about 11 movies.