"The gameplay and strategy of egg breaking are in line with the high sensitivity and importance that Chinese often attach to non-verbal information in social and business interactions. ”
The May Day holiday has just ended, in addition to relaxing and enjoying leisure, these days, have you and your friends or family come to a few rounds of the popular "eggs"?
At first glance, it sounds like a derivative of some kind of egg scones. It's actually a poker game. Two decks of 108 cards, four players play in two pairs, each with 27 cards.
In 2023, this poker game born in Huai'an, Jiangsu Province has become popular in the financial industry, and the investment community's former favorite Texas Hold'em poker limelight has been robbed of eggs, but some people have found that this advance and retreat actually reflects the activity of investors in the Yangtze River Delta and the declining trend of US dollar investment in recent years.
The rules of the game are not complicated, when the cards are played, they can be played individually, and four or more of the same cards can form a bomb, and you can win any other hand except for the "bigger bomb".
In terms of victory or defeat, whichever team plays the cards first wins.
The fun part is that there is a key tie-up in the rules that determines which team will play first.
This means that the game is not simply a matter of taking turns to play cards, but rather the order in which cards are played according to the size of each round, and whoever has the highest card can control the next round.
This adds to the game's variables and strategic depth, so it's very dependent on players working together.
However, like Texas Hold'em, there is also a deep meaning to economics in the game of egg hunting.
In today's article, we have sorted out 8 common principles, hoping that while playing, you can also master some boring but cute and amiable knowledge because of the eggs.
The Cooperative Game of Egg Economics
Although they are both poker games and have certain gaming characteristics, Egg Hunt and Texas really reflect the cultural differences between China and the United States in a sense.
Texas Hold'em is a game that highlights competition and individualism. It emphasizes the optimization of individual strategies and the precise calculation of risk. Players strategize by speculating on their opponent's behavior patterns and carefully calculating probabilities.
Every step of Texas Hold'em is like a small stock trade on Wall Street, whether it's an additional investment, a pocket, or a painful cut, and each player is trying to grow his or her bankroll.
In contrast, the egg game emphasizes more teamwork. Because there is a concept of "teammates" in this game.
Every time you play a card, you are silently communicating with your teammates and opponents. Players in the egg often need to consider: how do I play my cards so that my teammates can understand my hand and how I play while confusing my opponent?
This is in line with the high sensitivity and importance that Chinese often attach to non-verbal information in social and business interactions.
The opportunity cost of egg economics
In the egg, it is impossible to pick up the cards after they are played, no matter how strong the cards, there is only one chance to use them, and there is no regret about falling cards. This is a very good example of the concept of "opportunity cost" in economics. Opportunity cost is not a cost, but a "benefit that is given up on other paths".
For example, if you have a king, although you can often win a round of cards when you use it, the opportunity cost of using a king is that it will be more difficult to compete for a round of single cards in the future. Therefore, the calculation of the timing of the cards, that is, the "opportunity cost", is carried out throughout the egg game.
Every time a card is played, it means weighing the "pros" of the moment and the "cons" of the following rounds. Being able to calculate more comprehensively and in the long term means a more accurate grasp of the opportunity cost, which is reflected in the hand that has a better chance of winning.
Asset allocation in egg economics
There is also a truth of asset allocation hidden in the egg. Each card a player holds in a game can be considered an asset, and how these assets are combined to maximize their utility is the key to winning the game.
For example, let's say you have a bomb in your hand and a few high cards that are powerful enough to overwhelm your opponent's dominant cards in one go and get a chance to play.
But if you take the bomb apart, you can make a straight and a three-two, and you'll need to make a strategic decision about whether or not to split the bomb.
Just like in the investment market, we have a limited amount of money in our hands, and there are many types of assets – even the same asset, such as stocks and funds, there are many options.
So how do you optimize your assets?
In fact, the same as the egg, one to look at the fundamentals of the benefits: just look at the card power, then the bomb card power is obviously very strong, straight and three with two is relatively weak;
Just like when investing, although the yield of bonds is generally lower and generally not as good as equity assets, but in times of economic downturn and deflation, long-term bonds are a very good choice to generate stable income.
The credible deterrence of egg economics
In Egg Hunting, the talking cards are considered unruly, so we need to send a message to our teammates and opponents through our own cards.
For example, playing a smaller single card, such as a 3, can be interpreted as saying "I need support" to a teammate, and throwing a bomb at a non-essential moment can be a wasteful way to send a message to your teammates that they have more strong cards in their hands, encouraging them to be more bold in the next rounds, knowing they are capable of supporting at critical moments.
This alludes to the "credible deterrence" model of game theory, in which unnecessary spending – such as investments in idle factories – is used to demonstrate one's strength to one's opponents while also reassuring one's allies.
At the heart of this strategy is "trusted signaling" – not only to deliver the message, but also to ensure that the receiver of the message perceives the message as credible.
For example, "showing off with a strong card" itself is irreversible, and this irreversibility is precisely the guarantee of credibility - after all, playing a swollen face and filling the fat man's reluctant use of cards, although it may cause the opponent to misjudge at the beginning, but the resulting reduction of their own later card space will bring substantial losses.
In marketing, companies prove the superiority of their products by investing in expensive advertising campaigns or high-spec product quality. These behaviors are essentially a kind of signaling with the aim of proving the high value of their products to consumers.
This strategy is similar to the sacrifice of big cards in egg hunting to deliver a signal – both increase the credibility of the signal through some kind of cost (economic cost or in-game strategy cost).
Information disclosure of egg economics
Information disclosure is a critical part of corporate finance and accounting research. In corporate management, proper information disclosure can reduce market uncertainty, increase the value of the company on the one hand, and help investors make more informed investment choices on the other.
In egg hunting, information disclosure is achieved through a round of cards. The process of playing cards is not only about revealing your own cards, but also about letting your opponents and teammates understand the type and strength of your unplayed cards, so as to influence their strategic choices.
When the hand is very strong, or the cooperation of teammates is very needed, we will try to send a clearer signal to reduce the probability of misjudgment of teammates, and in the case of weak hand strength or very unfavorable scenes, we often need some confusion and confusion of the way to play cards, to disrupt the opponent's judgment and thinking, in order to win in chaos.
In business practice, in areas involving innovation and intellectual property, companies can clearly demonstrate their R&D prowess to the market and competitors by explicitly protecting their technology and innovations. Similar to the explicit use of strong hands in egg hunting to secure an edge.
In the face of a crisis or unfavorable public opinion, some companies may adopt a more conservative or vague information disclosure strategy to reduce the impact of negative information on brand and consumer confidence. By not providing too much specificity, businesses can find ways to solve problems or adjust strategies while controlling the narrative.
Nash equilibrium in egg-breaking economics
The information game mentioned above may be relatively abstract. Because as mentioned above, the cards played are public, so the signals transmitted are the same without considering gestures, ciphers or tacit understanding, so how to build an advantage through information transfer?
This is achieved by choosing a different equilibrium strategy, i.e., mixed equilibrium or separate equilibrium. In segregated equilibrium, the behavior of the sender of the message and its type can be perfectly distinguished, and the receiver of the message can accurately infer the type of sender by observing these different behaviors.
In mixed equilibrium, different types of message senders choose the same action or strategy, making it impossible for the receiver to distinguish the type of sender based on mere observation.
For example, when it comes to the endgame stage, there is a straight and a single card in hand. In most cases, the general choice at this time is to play a straight first, and then a single. With only one card in the hand after a straight, it is easier for teammates to make targeted combinations for this card and let them win in the end.
Admittedly, the fact that there is only one card in your hand will also be observed by your opponents, but at such a critical time, letting your teammates know your hand is even more likely to improve your win rate, not only simplifying the complexity of the game, but also improving the overall performance of the team by reducing information asymmetry.
At this time, reducing information asymmetry on their own side is greater than the threat caused by the enemy knowing more information, so the rational approach is to choose "separation equilibrium", that is, through a clear and unambiguous signal to tell others on the field their own card type and profit, and after the straight, holding a card in hand, it is equivalent to "I need a single card" This card type is announced to the world.
However, if the opponent is in control of the game, that is, if the opponent has more strong cards, when the opponent knows that you have a single card in your hand, there is often no chance to play the card.
At this time, it is often necessary to choose "mixed equilibrium" to win in chaos. After a single card is played, and you still have five cards in your hand, then the five cards may have a pair, it may be a straight, or even a three-fold two...... There are various possibilities, and then the opponent will inevitably be afraid because they can't grasp your information. It is even possible to make a mistake in a panic and make a straight move in the case of a big advantage, and send the victory to us.
Therefore, although the information is passed on to everyone, depending on the situation of the hand in the hand, it is still possible to seek greater benefits by choosing different types of game equilibrium: the advantage chooses the separation equilibrium, which increases the certainty of victory by reducing the information gap, and the disadvantage chooses the mixed equilibrium, which increases the likelihood of the opponent making mistakes by maintaining the information gap.
The strategies of egg economics are complementary
There is a mantra called "Leave the weak card to send your friends away, and help your teammates take the first swim." From an economic point of view, this is really about complementarity of strategies and signaling. In the case of a weak overall hand, the player can increase the probability of a teammate successfully playing and winning the hand by keeping strong hands (such as bombs) that the player can use at key moments.
As mentioned before, cooperation between team members is crucial in egg hunting. This means that players may sacrifice their short-term best discard options to help their teammates get their first game at a better time – to win the first round of discards. This strategy requires optimization of the team's long-term goals, not just the immediate benefits of the individual, which is a key point in cooperative game theory.
The reason why cooperative games can achieve the effect of 1+1>2 is that strategic complementarity is the key. For example, a player may trade his only bomb for discard rights when he has a lot of loose cards in his hand, and then deliberately play a small pair so that his teammates can take it smoothly, giving his teammates a chance to control the game with a larger combination against the other team's strong hand.
In the construction and engineering industry, smaller or specialized companies often bid on large projects jointly, similar to the complementary strategies in the egg. One company may have strong capabilities in a particular area such as plumbing and wiring, while another company specializes in architecture or design.
By working together, they can form a stronger team to work together on projects, optimizing resource usage and increasing the chances of winning contracts.
The Risk-Reward of Egg Economics
Unlike Texas Hold'em, the winner is not determined by a single hand, so there is also a long-term resource problem - that is, how to coordinate when the luck is good and the luck is bad.
If the shuffle is professional enough, then people's luck is random from the probability point of view, there are some games even if you rack your brains are difficult to win, because the key cards are on the opponent's side;
In these situations, the player's strategic choice, psychological game, information utilization, and teamwork are particularly crucial. That is to say, if one's attention and card counting ability are regarded as a limited resource, then "good steel should be used on the cutting edge", and the main energy should be allocated to the medium difficulty of the game.
Within a hand, there is also the issue of resource allocation. At this point, the resource is the hand. We need to decide when to use which card to maximize utility, such as using bomblets early to save larger strategic assets for more critical moments, etc.
And if we refine the problem to this point, we will find that the egg and Texas are intrinsically similar - both involve risk assessment and strategy selection. We need to weigh the risk of hand play, i.e., the possibility of being suppressed by the opponent, and the reward of hand use, i.e., the potential benefit of successfully taking the deal. As in Texas, this involves evaluating the expected outcomes and possible risks of each action to determine the best strategy.
In financial investing, investors need to decide how to allocate the assets in their portfolio to maximize expected returns and control the level of risk. This involves choosing between different assets and allocating weights, similar to deciding when to use different hand types to maximize the probability of winning. Investors also need to rationally evaluate the expected return and risk of assets to achieve the best risk-adjusted returns.
You see, Egg Hunting, a seemingly simple poker game, is actually rich in strategic and economic wisdom.
It is not only a duel of intelligence and strategy, but also a platform for understanding and applying the principles of economics. Whether it's information disclosure, resource management, or game equilibrium, Egg Hunt provides a vivid and interesting practical scenario for us to learn and explore the complexities of economics while entertaining.
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Written by | Sima Yi
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