GGpoker's 'Adjusted Stack' Formula: Why is its inaccuracy overlooked?



This formula is designed to be an approximation of the value of a stack for tournaments' days 2

GGpoker's adjusted stack formula (f1 * (day 2 chips / day 1 starting chips) ^ f2) is designed to estimate the value of a stack for tournaments' Day 2. Here's what the formula means:

- f1 factors in the tournament characteristics such as the payout structure and the percentage of players in the money (ITM).
- f2 reflects the concept that preserving chips is more critical than winning more.
However, there are some issues with this formula that we need to address.

Issues with the Adjusted Stack Formula

First, the sum of all adjusted stacks doesn't equal the total number of chips divided by Day 1's starting chips. If all players were to sell shares at a markup of 1, they'd receive significantly less than the entire prize pool. Isn't that odd?

[I’m actually not the first person to raise this issue (I’ve read it somewhere).
You can check yourself by toying around with the stacks. You’ll notice that short stacks’ adjusted for stack is only increased by 0.2 starting stacks while big stacks’ adjusted for stack is reduced by 2 or more starting stacks. This doesn’t even out.]

Second, the formula is oversimplified and lacks mathematical transparency. It needs additional variables to account for the payout structure, proportion of players ITM, and the importance of ICM.

Third, the formula does not accurately reflect the situation when a tournament starts ITM on Day 2. The f2 factor becomes less reliable in these situations, and this isn't accounted for in the formula.

For more insights, you can check out my spreadsheet here: Adjustment for stack model for day 2 ITM

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Backstory



You may wonder why I'm fussing about this. I'm currently in the $10mio $10K Day 2 and trying to sell some action as my avg BI is around $250. However, according to GGpoker, my stack is worth $20k less than I think it is. I believe my 6.7x starting stack is worth 75.1k and not 56.6k (see google sheet).



Last August, I sold 30% action for the WSOP online main event at a markup of 1.18. There was about 2 hours of play left before reaching the money. Once we did, the value of my short stack increased significantly. If ITM had been reached before Day 2, the equivalent markup would have been around 1.4.



This problem needs more attention, and I hope my observations spur some discussion.

I spotted some inconsistencies with short stacks.

I've updated the spreadsheet so results are more accurate now.

Notice that if all the sellers were to sell shares at a 1 markup on GGpoker they would be collectively losing more than 30% of the prizepool.

Very good topic. Thanks.