What is Liar's Poker?
- Liar's Poker is a game of strategy and psychology in which players hold random dollar bills with close attention to the serial numbers on their respective bills.
- It is also the name of a Michael Lewis book that depicts Wall Street bond trading culture.
- The rules of Liar's Poker require escalating bids, thereby increasing the game's stakes.
The rules of Liar's Poker are fairly similar to those of the card game "Cheat." Players hold random dollar bills with close attention to the serial numbers on their respective bills. The objective of the game is to bluff opponents into believing that your bid does not exceed the combined sum of all of the serial numbers.
Liar's Poker is also a book by Michael Lewis that depicts the Wall Street bond trading culture at Salomon Brother's. Lewis, who previously worked as a bond trader, has said that he intended the book to be a cautionary tale about questionable and deceptive behavior and practices at his workplace. But he admits that some individuals have used the book as a blueprint to seek personal profit.
Understanding Liar's Poker
In Liar's Poker, if one player bids three "fours," he predicts that within all of the dollar serial numbers held by all players, there are at least three "fours." If the player's bluff is not called, the next player must either bid a higher frequency of any other digit (five "twos") or can bid a higher number at the same frequency level (three "sixes").
Strategies in Liar's Poker
The number of players in the game can affect the probability of winning, though the game itself largely rewards and benefits those who employ deception and trickery to win. Rather than merely bid as accurately as possible, the players are taking turns at coaxing their rivals to make a mistake as they play.
The rules of the game require bids to continue escalating, thereby increasing the game's stakes. With more than two players, it is a frequent strategy to continue to raise the bid given the likelihood of being challenged and the related likelihood of losing when challenging. The strategy relies on continuous bluffing in hopes of potentially winning.
The game is comparable to "Liar’s Dice," a game where players roll dice, hide the numbers they have rolled, and then make bids on the total number of dice they believe were rolled by all players with that face value. Here again, the players bid and bluff until challenged by another player.
Typically if a player poses a challenge in Liar's Poker and is incorrect, they must pay the player they challenged. If the player who was challenged was found to be incorrect, then they must pay every player who posed a challenged. Usually the payout is one dollar but that may be increased depending on the agreed-upon rules.