Stripped-down Poker: A Classroom Game to Illustrate Equilibrium Bluffing
This paper proposes a simplified version of poker as an instructional classroom game. In spite of the game’s simplicity, it provides an excellent illustration of a number of topics: signaling, bluffing, mixed strategies, the value of information, and Bayes’ Rule. We first briefly cover the history of poker in game-theoretic contexts. Next we characterize Stripped-down Poker: how to play it, what makes it an interesting classroom game, and how to teach its solution to students. We discuss possible applications of this model to real-world interactions, such as litigation, tax evasion, and domestic or international diplomacy. Finally, we suggest modifications of the game either for use in class or as homework problems.
First version: May 2004 (Download the original, longer version.)
This version: July 5, 2006