My local card room runs a daily tournament which usually nets between 20-25 players.

Buy-in is $35+5 which gets you 5k in starting chips. An add-on is offered for an additional $20 dollars which gives you an additional 3k chips (totaling 8k). Blinds start at 25/50 and move up every 15 minutes. One add on may be purchased at the start of the tournament through the end of round 2.

The field is usually pretty soft, and they pay top 4 spots with 5th usually getting their $40 Buy-in back.

Given that the prize pool is quite low in respect to the entry fee, is it worth purchasing the add-on?

I typically don't purchase it from the start, but if I lose a couple small pots early on, I usually get it to top off my stack. Just wondering if this is optimal strategy given the circumstances.

Depends on what others are doing. If nobody purchases the add-on, then paying to have the extra chips in front of you doesn't have much benefit. But if a critical mass of players do, then you want the extra chips right from the start.

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You make a good point and I appreciate the response. For this particular game, I think that typically 40% of the players do end up picking up the add on by round 2. Of that number, probably only half start the tournament with the add-on.

I tried researching a general rule for when it is optimal to take an add-on in a tournament, but I suppose it will always game-dependent. I normally play live cash, so I figured it wouldn't hurt to ask the experts

I'm no expert

Confidence in your skill set is also important. Against a tough field you're better off playing shallower but against a weaker field you want as many chips in front of you as possible.

If your field is soft and there are a decent number of players taking the add-on at the start, then I would do the same.

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I think you are over thinking this one - the add on chips are cheaper - so buy them