HUBB GUIDE TO CARD GAMES

Economics-Themed Poker Games

Microeconomics: Same as Seven Card Stud*, except as follows:

(1) “A” is for “Ace.” An Ace represents an idiosyncratic productivity shock. Since the effects of innovation are uncertain, Aces are wild.

(2) “K” is for “Capital.” When a player who receives a King face-up, it represents an injection of capital and has the effect of an immediate one-chip raise. Everyone, other than the player who just received the king, must add a chip to the pot or fold.

(3) “Q” is for “Quantity.” A player who receives a Queen face-up immediately receive an additional card face up.

*Seven Card Stud Rules: Prior to the deal, each player pays an Ante (one chip). Two cards are dealt to each player face down, then one card is dealt to each player face up, then a round of betting, then there are three rounds in which one card is dealt to each player face up followed by a round of betting, then a final card is dealt face down to each player, then a final round of betting. The highest five-card hand, using any five cards from a player’s seven cards, wins. 

Econometrics: Same as Omaha**, except as follows:

(1) Measures of central tendency. The median card in the set of community cards is wild. Aces are always high.

(2) Bayesian vs. Frequentist. Card hands can represent either variance or precision. Each player may form two separate five-card hands, representing their highest and lowest possible hands. You can win as a Bayesian by having the highest hand (precision) or as a Frequentist by having the lowest hand (variance)—or both. Now, we know that Bayesians and Frequentists don’t follow the same rules. Bayesian hands are judged by standard poker hand rankings, using wild cards. Frequentist hands are judged without straights counting or cards being wild, so 2-3-4-5-6 is always the best (lowest) hand. (Again, Aces are high.) .

**Omaha Rules: Prior to the deal, players place Small and Big Blinds as in Texas Hold ‘Em. Four cards are dealt to each player face down, then a round of betting, then community cards are dealt and betting progresses exactly as in Texas Hold ‘Em. The highest five-card hand, using any combination of exactly 2 of a player’s cards and 3 community cards, wins. 

Macroeconomics: Same as Seven Card Stud, except as follows:

(1) OLG Model. Face up Kings and Queens represent the older generation. Each time a King or Queen is dealt face up, the receiving player must pay one chip into the “Bequest Fund.” Face-down Jacks represent the younger generation. When the hand ends, the Bequest Fund is divided pro rata among the face-down Jacks still in the game (and part of a five-card hand). If there are no such Jacks, the Fund carries over to the next hand.

(2) Smooth Pasting. I have no idea what smooth pasting is in economics, but in poker, smooth pasting says that you can form hi-lo straights using an Ace to “smoothly paste” the parts together. For example, Q-K-A-2-3 qualifies as a straight. Smoothly pasted straights are higher than all other straights, and are ranked by highest card at the end of the straight.

(3) Labor Supply. As we all know, the elasticity of labor supply is exactly 3. Therefore, Threes are wild. 

Modern War

This is I variant of the traditional children’s game “War.” The new rules are designed to create two parallel improvements over traditional War. First, Modern War, as the name implies, has different dynamics than pre-modern war.

Second, Modern War offers a faster and more entertaining game experience. The main problem with War is that continues interminably without a decisive resolution—perhaps a telling commentary on the namesake of the game, but not a desirable feature in a game. On the other hand, whoever captures more cards ends up with a diluted deck in terms of card strength, which in turn makes it easy for the other player to catch up, and this catch-up dynamic is desirable to make the game feel competitive. Modern War is designed to retain this advantage in a quicker game.

The key dynamic of War is the showdown that occurs when two cards tie. Modern War retains this dynamic and in fact increases its role in gameplay.

Modern War introduces two key variations. First, two decks of cards are used, with each player starting with an identical deck. Second, rather than having the player with the winning card take the losing card, the player with the losing card discard it. This guarantees that each player starts with an equally strong deck, and means that there are 8 of each face card in the game. But the main consequence is that the decks are rapidly depleted, with victory inevitable for one player within three or four times through the (shrinking) deck, or within about 15 minutes. It also means that weak cards are rapidly eliminated from the player’s deck, leading to more and more showdowns between face cards.

The card game modern war does abstractly represent two aspects of modern warfare. The regular process of comparing cards and winnowing out the weaker ones is the “attrition” phase, representing the costly, negative-sum game of frontal warfare. A tie induces a showdown that represents modern operational warfare—maneuvers designed to break or flank enemy lines to encircle and capture opposing forces. Hence, the only times cards change hands in Modern War is during the showdowns representing the breakthrough and exploitation operations. Finally, a lesson of modern war, most strikingly demonstrated in Case Yellow, the German invasion of the Low Countries and France in May 1940, is that even with equal starting war material, differences in the timing of their deployment and matchups between forces can rapidly lead to a decisive victory.

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