5 ways in which the Pareto Principle affects online poker...
The Pareto Principle, popularly known as the 80 / 20 rule, has a huge effect on many aspects of our lives. In short this states that 80% of the results come from 20% of the efforts - though it is commonly also used to show results (80% of the wealth is owned by 20% of the population). Once you become familiar with the Pareto principle you will see it again and again in all manner of life situations - the ratio might not always be exactly 80% / 20%, but you will be surprised how often it is close!
Poker And The Pareto Principle #1
80% of the profit is won by 20% of the players... this is actually pretty close, when we surveyed the results of 2 million SNG tournaments on Stars back in late 2007 it was something like 76% / 24% here (banner on the top left for SNG Planet if you want to look at the survey results).
Poker And The Pareto Principle #2
Of the 80% profit that is won by 20% of the players... 80% of that is won my 20% of the profitable players. So, the top 4% (ish) of players are actually sharing around 60% of the total profits.... here we could easily drill down twice or even 3 times more, eventually reaching the tiny percentage of elite winners who are taking the millions.
Poker And The Pareto Principle #3
In a poker tournament we can also drill down using an approximate 80/20 through the prize structure... so 20% win 80% of the money, of the winning players in an individual tournament 80% of the prizes go to the best 20%... and so on. Not exact, but I am sure that you can see the pattern!
Poker And The Pareto Principle #4
You will win 80% of your pots with the top 20% of starting hands. Seems kind of obvious right when it comes to pots... what about total money here though? Personally I think starting hands to cash will be more like 90% comes from 10% - could be huge individual differences here though, a LAG and a Nit having very different results.
Poker And The Pareto Principle #5
Knowledge is my final idea... that 80% of the strategy knowledge you use to win at those tables comes from 20% of what you read. This is partially caused by the fact that there is a lot of poorly written strategy content out there (!). Mostly because, on any individual players learning curve there are some basic building blocks which plug big leaks or spark big profits... and then lots of smaller ideas which just add the slim percentage here and there.
So, anyone have any more ways in which the 80% / 20% rule applies to poker??
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GL at the tables, Mark