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Game Theory in Poker

Poker, as  a game involved with odds and betting can be analyzed using game theory in order to partially optimize the players’ outcomes. As poker is a zero-sum game, the overall outcome (when adding the wins and losses of all players) is zero. Also, poker has a high variation of possible outcomes, as well as the structure of the game, with multiple round of betting during which it is still unclear as to who will win. Therefore, game theory ends up being very helpful in improving the outcome in poker for all players (and more importantly, yourself).  At the end of every hand, the outcome is relatively straightforward; a player either wins, ties, or looses. However, the trick to playing poker involves betting the right amount at the right time, based on your odds of winning the hand, as opposed to having one of your opponents winning.

For each round of betting, a player has three options: folding, checking/calling, or raising. Then the remaining player(s) have these exact same options as well. For each choice out of these, a player has some sort of expected outcome depending on their current odds of winning depending on which option they chose. However, there is never a pure strategy that will always win. So, it is important to play a mixed-strategy game in order to optimize the outcome.

I agree with Swanson’s “Game Theory and Poker” article in that even if the optimal strategy is played, once can’t just win. Instead, the outcome is best if you realize when your opponent is not playing optimally–either by catching bluffs, or picking up on other key actions that give away how good or bed their hand is. Then, once the opponents’ sub-optimal actions have been noticed, it is best for you to play a non-optimal strategy to gain the most of their mistakes. Even though you remain vulnerable, once you have information about your opponent, this can be used to an advantage and improve the odds of winning, and therefore the total expected outcome. Therefore, knowledge of game theory can be very advantageous in playing poker.

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