The Peter Principle and poker

For those of you who aren't familiar with it, the peter principle states that
"successful members of a hierarchical organization are eventually promoted to their highest level of competence, after which further promotion raises them to a level at which they are not competent." I think that this often applies to poker.

These types of stories seem way to common. Person X starts w/ a $100 initial deposit and quickly builds it up to $300 or so playing $10 NL. They then move up to $25 NL...all goes well and their bankroll swells to $1000 dollars. They, again, promote themselves to $50 NL and things go great! Their bankroll soars to $3000 and they are running hot. Then, they move up to $100 NL and...Disaster. They are getting stacked left and right. Their monsters never get paid off and their bankroll is decimated. Soon they have dropped 2/3 of their buy in and are faced with either dropping down a level or busting out completely. Now their ego comes in and tells them that they shouldn't drop down as they are "too good" for these limits etc. Before they know it they are broke and forced to grind it out w/$50 at 10 NL again.

I think that this is a situation where a poker player falls victim to the peter principle. In effect, he continues to promote himself up levels too quickly when he has not played enough hands at that level to truly judge his competence. This is worsened by the fact that he or she could simply be running hot at a level where they are not truly skilled enough to play at and when his or her game is full of leaks. Once they reach a level at which they are not competent their ego refuses to let them back off and plug leaks at the low limits and destroys them completely.

To avoid the peter principle, I suggest getting software like poker tracker and track the number of BB won per 100 hands over 30K hands or so. This will give you a great idea of whether or not you are truly beating the game. I also suggest not immediately moving up to a new level when you have the right bankroll to do it. Play a certain number of hands in each level and observe the other games before you move up. Put the oppents hands into PT and see how they play. Know what you are up against and choose your games wisely! Think of this as getting reconnaissance on the other players. Poker is a game of information and the more you have the easier it is.

In closing, Don't fall victim to the peter principle. Know your skill level, know your opponents, know your limits and don't move up just because you have a nice bankroll

Nice post, I always seem to go through a rocky spell when I move up. I think it just takes me a while to adjust. But this can be dangerous when a buyin is worth twice what you are used to and its easy to tilt/panic.

Now I will slowly dip myself into the level above for a bit before committing to it full time, eg throwing in a table or two on weekend evenings and probably playing tighter than normal for a bit until I get the feel for it.

Brilliant! I'm a huge believer in the Peter Principle since I work in a megathlic corporation, and am surrounded by it's evidence almost daily.

You've put a new twist on the old Circle of Death truism. The only thing that doesn't happen in poker is incompetent managers promoting even less competent people than themselves in order to protect their tiny empires.

Having just suffered a humiliating bout of this principle, I fully endorse the idea that hands played and experience gained are more important than the bankroll you've built.

I understand what you are saying, but disagree with some of it. I think you should move up to the next level as soon as you have the roll for it assuming you will move back down if you run poorly. Saying that you should play a certain number of hands before you move up is very arbitrary, how do you decide the number? Why that number? The growth in bankroll allowing you to move up shows that you have the ability to beat the current level more than completing a set number of hands does.

However, I think when you reach a certain level you should slow down on moving up. For me personally Im going to work up towards $200NL as soon as I can, and stay there for awhile until I have established a solid winrate over a substantial sample of hands. Before the "higher stakes" I think there is more value in moving up quicker than trying to eek out the an extra ptbb/100.

That's his point. Your ego will often prohibit you from moving down.

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Originally Posted by jackvance

That's his point. Your ego will often prohibit you from moving down.

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He said:

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I also suggest not immediately moving up to a new level when you have the right bankroll to do it

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Playing a certain number of hands allows you to affirm that you are not simply running hot at a certain level. You can grow your bankroll substantially by getting a couple of lucky stacks and you may not be sufficiently skilled to move up even tho you quickly "beat" the game at a certain level...

Good point. Number of hands by itself is also arbritrary, indeed. But if you combine it with the win rate or BB/100 or what have you, then you have a solid basis upon which to make a judgement, no?

I think it is nice to sample the higher limits, when you have the chance, yeah, why not?

What I've just found, though, is that what I thought was a decent number of hands at limit X did not prepare me for the worst run of flat cards and bad "luck" in my "career".

I had a very good BB/100 after around 15,000 hands at $10NL. Moved up, moved back down after some losses, but the trough continued. It lasted about 5,000 hands. This was a new experience for me, and perhaps after 100,0000 hands I'll be able to tell of a 15,000 hand down turn. My worst run before this was around 2,000 hands. This was a huge lesson in the psychological aspect of the game, and one that I was not fully prepared for.

I've got over 40,000 PT hands. I thought that that was pretty decent, but now I know that it is probably not. My experience was over-valued. I thought that I was prepared for everything. I was not. Now, maybe it wouldn't have helped, but if I had played another 10,000 hands at $10 NL, then perhaps I wouldn't have lost has much money as I ended up losing. I suppose that that attitude is very conservative.

Of course, there is the element of chance, and I am sure that some players can go for years never hitting a significant run of bad cards. It is chance after all. But my point of agreement with Crushednuts is that maybe the extra experience will not only improve your skill level, but will also prepare you for all eventualities in the mental part of poker.

Everybody is different ( I think I'm rambling here), but a conservative approach may bear out over the very long haul?

Anyhow, I like the analogy with the Peter Principle. Nice way of thinking about the game.

Thing is Jiggus.. you have to find these things out by yourself. Reading what other people have to say about it only gets you so far, some things you just have to experience first-hand before they really sink in.

I mean, I read on his blog that Gabe moved up and played break-even poker at 100NL for 20k hands and then moved on to 200NL because he has confidence in his game. Is this "stupid"? Well, it worked out for him.

Wish I'd have known this 2 weeks ago when I got stacked a couple of times right after moving up too quickly. I had hit my 20 buy-ins and moved up. As I was killing 10NL I thought, ahh what the hell just go to 25NL everyone says it's the same and this is taking too long. Ya the players are same but the downswings I couldn't handle. I got timid and afraid of losing and almost lost my BR. Got it back to a $100 bucks and got the hell off party to get another bonus, and change it up. This time it's patience, and x number of hands or ptbb/100. Anyone want to try to come up with some figures and maybe we could have an alternative to the std. BR management idea (or an addition), because FWIW the only possible leak in the BR management thread may be that with the wealth of info here, some of us may kill the lower limits too fast and too easily to be ready for the next "promotion". Or maybe it's just me.

After an "adjustment downswing" of -4.5 buyins, I already feel totally at home in 20NL lol.

My BR must be close to $3k now and I'm still at $25/£25 most of the time :o

Wow, you've got amazing restraint biondino :).. the second I'll hit $1k I'm moving to 50NL and that already requires some self control for me.. but I've taken it as a rule to lose 3-5 buy-ins when I move up because I need to adjust to the playstyles and most of all the money difference which totally throws off my reads (suddenly everything seems "aggressive").

(maybe single tabling and buying in short for 2 days might help when I move up, come to think of it.. problem is this is too booooooring)

I would definitely single-table for your firsat few sessions at a new limit. You'll find the adrenaline etc. enough to keep the boredom at bay! I actually did buyin short for a while when I played $50 tables - I'd invest $40 because that was actually LESS in real financial terms than I was risking at £25NL!

The weird thing is that I can happily sit down at 5max $50NL but balk at 10max. Meh.

Actually, I am beginning to feel left behind in poker at the moment - most of my friends who I shared a level with or was ahead of are up to $50-$200 by now, and I really feel I've fallen behind. I am scared though because I kn0ow the average $25/£25 player so well now and I would feel so... uncertain at a higher level.

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Originally Posted by biondino

I would definitely single-table for your firsat few sessions at a new limit. You'll find the adrenaline etc. enough to keep the boredom at bay!

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Only the first 20 minutes. Then I loaded up to full. Then the boredom of seeing too few hands kicked in and I fired up another table after about an hour of play. Meh..

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I am scared though because I kn0ow the average $25/£25 player so well now and I would feel so... uncertain at a higher level.

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I can totally relate, but I truly believe that the people and the play aren't *that* different. However, it'll take 2-3 days before you can see this! I think if you can minimize your losses in that time period (which is hard, because you'll be disoriented) you'll soon be feeling right at home again. And since everything doubled, this is a good idea in the long run.

That's my reasoning atleast.. too inexperienced to know if it's accurate, but I go on this for now :)


~ and I actually already feel too much at home at 20NL now. Had another downswing yesterday night because I got overconfident after I noticed how similar the play was to 10NL, which I could routinely murder.. so suddenly I got over aggro (raise everything) and over floating (called everything down, even OOP, assumed they were bluffing constantly, never wanted to back down, etc). Also the fact that a bunch of people came over and they were all in awe about the money I was making right in front of their eyes, this didn't help calm down my ego either. But it's all good.. in the long run I should do fine lol..


(funny thing, unrelated but whatever.. this girl came over while I was playing and she was looking all nice, so I complimented her and she proudly told me how she had made €10 from a modeling session, and right then I cracked AA and made double that, in the 2 minutes she was there.. that was cool lol)

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Originally Posted by Trainer_jyms

Wish I'd have known this 2 weeks ago when I got stacked a couple of times right after moving up too quickly. I had hit my 20 buy-ins and moved up. As I was killing 10NL I thought, ahh what the hell just go to 25NL everyone says it's the same and this is taking too long. Ya the players are same but the downswings I couldn't handle. I got timid and afraid of losing and almost lost my BR. Got it back to a $100 bucks and got the hell off party to get another bonus, and change it up. This time it's patience, and x number of hands or ptbb/100. Anyone want to try to come up with some figures and maybe we could have an alternative to the std. BR management idea (or an addition), because FWIW the only possible leak in the BR management thread may be that with the wealth of info here, some of us may kill the lower limits too fast and too easily to be ready for the next "promotion". Or maybe it's just me.

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If your roll was at $500 and was built up from $10nl then there is no reason you shouldnt move up to $25nl unless it took you like 50k hands to get there. What caused you to lose the money was not following the BR management advice [which you didnt really do], but it was playing scared. You said you got it all the way down to $100, that isnt following the BR guidelines. Im moving up to $50nl today, if I drop a few buyins in a short amount of time I will move back down, if you are going to move up "quickly" [some would say 20 buyins is a lot for the smaller stakes] then you have to be willing to move back down as well.

This is a debatable topic, and there aren't many wrong answers.

However, there's two things we're worried about here: confidence and variance. 10-15 buy-ins is probably enough to deal with the variance at very low stakes (<25NL) because the players are so bad. However, you may want 20 buy-ins to be comfortable at 25NL+.

20 buy-ins is good for low-med stakes inmho, but I'm a bit conservative. I moved up to 50NL at $1000 but waited until $3000 for 100NL. Part of this was a lack of confidence in my game. 30 buy-ins gives me the confidence I need to play good poker.

I am a big fan of moving up as soon as you reach the bankroll requirements. This allows you to maximize your profit and learn the game at a new level. I stagnated forever at 25NL before moving up. But each level since then I have learned much more quickly.

As an aside, bonuses make it possible to move up more quickly than your skill level dictates so I could see playing minumum 10k hands per level before moving up.

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Originally Posted by donnybaker

This is a debatable topic, and there aren't many wrong answers.

However, there's two things we're worried about here: confidence and variance. 10-15 buy-ins is probably enough to deal with the variance at very low stakes (<25NL) because the players are so bad. However, you may want 20 buy-ins to be comfortable at 25NL+.

20 buy-ins is good for low-med stakes inmho, but I'm a bit conservative. I moved up to 50NL at $1000 but waited until $3000 for 100NL. Part of this was a lack of confidence in my game. 30 buy-ins gives me the confidence I need to play good poker.

I am a big fan of moving up as soon as you reach the bankroll requirements. This allows you to maximize your profit and learn the game at a new level. I stagnated forever at 25NL before moving up. But each level since then I have learned much more quickly.

As an aside, bonuses make it possible to move up more quickly than your skill level dictates so I could see playing minumum 10k hands per level before moving up.

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I agree with a lot of this, I just moved up to $50NL at $1k, and plan on following the 20 buyins rule for $100NL and $200NL, but then going much more slowly from there and if I hit a bad swing moving down before it gets worse.

For bonuses I withdraw the money exactly for that reason, so I dont become rolled for a higher level without any true increase in skill.

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Originally Posted by jackvance

Thing is Jiggus.. you have to find these things out by yourself. Reading what other people have to say about it only gets you so far, some things you just have to experience first-hand before they really sink in.

I mean, I read on his blog that Gabe moved up and played break-even poker at 100NL for 20k hands and then moved on to 200NL because he has confidence in his game. Is this "stupid"? Well, it worked out for him.

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Duh. You think I'm not finding this out for myself? I have played a few games of poker, after all. I'm merely stating, that putting the concept of the "Newbie Circle of Death" -- which is what I feel this really touches upon -- is a more interesting way for me to think about the subject.

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Originally Posted by biondino

My BR must be close to $3k now and I'm still at $25/£25 most of the time .

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Move up now, seriously! Don't even bother with 50NL, go straight for 100NL.

I can relate. I have played a year at 25 Nl and I am currently
making 800-1000 month if I can do bonuses as well.

I am currently making transition to 50 NL but the funny thing
is that I think the risk/reward ratio is much worse than in
25 Nl.

If currently I play at 25 NL tables I can find player on flop%
near 50 and average pot is over 10 dollars.

At 50 NL average pot is only 13-15 dollars but games are much
tightier 33-36%.

So it seems hard to find a reason to move up except your own
development as a poker player...

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Originally Posted by Turska

I can relate. I have played a year at 25 Nl and I am currently
making 800-1000 month if I can do bonuses as well.

I am currently making transition to 50 NL but the funny thing
is that I think the risk/reward ratio is much worse than in
25 Nl.

If currently I play at 25 NL tables I can find player on flop%
near 50 and average pot is over 10 dollars.

At 50 NL average pot is only 13-15 dollars but games are much
tightier 33-36%.

So it seems hard to find a reason to move up except your own
development as a poker player...

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100NL is a sweet spot, try it if you are bankrolled for it. Believe me, the games are quite soft at that level.

I had a similar problem and got too comfortable at 100NL, now I realise how much profits I have given up by not moving up earlier.