“These days computers analyze the crap out of everything …. geeks have created range vs. range analysis software that solves most poker problems.”
Those provocative words began Roy Cooke’s Card Player Magazine column about reading people. He explained that mechanically applying formulas causes serious mistakes. You should also study and adjust to people’s thoughts and feelings because they will often decisively change the way people play their hands.
I agree wholeheartedly, and the same principle applies more forcefully to negotiating tournament deals. Computer formulas tell you what the “right” or “fair” deal is, but, applying formulas without analyzing players’ emotions and thoughts will cost you lots of money.
Teaching negotiating strategy and psychology has been my profession since writing my doctoral dissertation about them at The University of California, Berkeley. I taught Ph.D. candidates at UCLA and employees of the world’s largest multi-nationals in twenty countries. My clients included GM, Chase, IBM, Chrysler, Mobil, Wells Fargo, and more than twenty-five others. Their 2018 revenues exceeded $2 trillion, about 10% of the American GDP.
Jan Siroky, a tournament coach, and I agree that many business negotiating principles apply to negotiating tournament deals. I call an important principle:
The Foundation Of Negotiations
Nothing has an objective value. Everything is worth whatever a seller will accept and a buyer will pay. Of course, “buyer” and “seller” can mean the people on opposing sides of any type of deal.
You may detest this principle. Many people, especially mathematically-sophisticated analysts, think there is or should be a correct price, one they can determine by factual analysis.
They can make brilliant arguments about why you should use this or that formula, but they ignore the fact that all deals, whether in business or at poker tables, are made by people, not computers.
Let’s relate that principle to a loss that greatly exceeds the total prize pools of all the poker tournaments in history. On Black Monday, October 19, 1987, over one trillion dollars was lost on the world’s stock exchanges. How much change had occurred in the reported assets, profits, sales, and other objective values of the listed companies since the preceding Friday?
Not one penny!
Companies don’t report or even calculate their profits and assets daily. The only changes were people’s emotions and thoughts. Because they were scared, people suddenly changed their minds about what stocks were worth.
Here’s a much smaller example of that principle. Antique dealers say, “I tried to sell that chest for $500 and couldn’t move it. I sold it at auction for $650, and the buyer had seen it, but didn’t buy it, in my shop for $500!”
The chest was exactly the same, but the auction changed the buyers’ opinion of its value. They may have thought, “If other bidders offer that much, it’s worth more than I thought.” Or they may have forgotten they had seen it at a lower price and just wanted to beat the other bidders.
It doesn’t matter why they would pay more. All that matters is that they would pay more. Learning what others are willing to pay or accept is a critically important negotiating important skill.
Because there are no objective values, you should always try to “get into their heads.” What do they think this deal is worth? The more quickly and accurately you answer that question, the better deals you will get.
What Should You Do?
Am I saying you should focus only on psychology and ignore the formulas?
Understand and apply the formulas to get the general range of possible deals. Then study, satisfy, and exploit the other players’ emotions and thoughts to get them to accept a deal at the best part of that range for you.
Because he believes he’s the best player, one chip-leader doesn’t want a deal. Because he’s tired or lacks confidence in his skills, another chip leader is eager to settle. A Maniac with a tiny stack will resist settling, while a Rock with the same stack will take almost any deal. The Maniac loves gambling, and the Rock is afraid of risks.
One average stack is depressed because he just took a bad beat. Another player with an equal stack just doubled up and feels lucky. Despite similar stacks, they will accept very different deals. In fact, the same player will accept different deals when he’s feeling up or down.
The formulas completely exclude these emotions, and the people who rely too heavily on formulas don’t even consider any desire except money. You know that people play poker for many reasons, not just to win money. They also have widely varying motives for proposing, accepting, or rejecting tournament deals. Occasionally, they even trade serious cash for glory.
Preston Oade, the author of The Art and Science of Poker Tournament Selection: Choosing the Games that Best Match Your Play, emailed me an example. From his work as a very successful attorney, he knew when to learn what people really want. Here’s his story.
“I was playing the final table of a $600 buy-in event. The remaining prize pool was about $45,000. Seven were left; it was 4:30 AM; and we’d played since noon. We were all tired, and most of us had enough chips to play for hours. One player suggested a deal based on chip stacks.
The payouts would range from $2,500 to $12,000. Everyone wanted a deal except the short stack, who insisted on playing it out. The others tried to pressure him, but he insisted on playing.
I quietly asked him, “What do you want?”
“I want first place and the ring that goes with it.” He wanted to show his children a championship ring. He didn’t care about the money. We quickly agreed to split the prize pool six ways. The short stack got the ring, but no money. Because we would all got more money, we quickly agreed. We were all tired, and everyone seemed satisfied with the outcome.”
If Preston had not asked that question, they might have played several hours, and most of them probably would have been less satisfied with the outcome.
Unfortunately, most Americans won’t ask enough or the right kinds of questions. Because negotiations are not part of our culture, many of us don’t seriously think about how to negotiate deals. We wouldn’t think of haggling at Walmart or most other places.
Because we rarely do it, we’re too uncomfortable to take the time to prepare and negotiate effectively in poker tournaments and many other places. Not negotiating well can cost you lots of money.
Fight Your Discomfort
Your discomfort is the enemy. It makes many people, perhaps including you, accept terrible deals in business, as consumers, and at the tables.
Don’t yield to that discomfort. You can’t play winning poker without taking many unnatural, uncomfortable actions. Negotiating tournament deals makes similar demands.
Don’t play well, but negotiate poorly.
Future blogs will describe tactics you will probably dislike, but – if you can fight your discomfort – they will make you hundreds or thousands of dollars!
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¹ This article is based on a column in Card Player Magazine. It’s the oldest and most respected poker periodical. You can read about 200 of my columns at CARDPLAYER.COM.