Here is another advanced article from Juicy Stakes Poker. We would like to explore the nuances of the Gap Concept in poker. As is so common in poker, a simple and even obvious idea in poker has subtleties that even experienced players sometimes are not aware of and those who are aware of them turn the theory on its head when they feel the time is ripe to do so.
The Gap Concept Has Real World Applications
The Gap Concept in poker usually refers to the betting before the flop. If someone raises ahead of you, you should have a better hand to call or raise with than you would need if you were the first to call or raise.
It refers to a kind of inflation of hand values as the betting proceeds before the flop. If player A calls or raises ahead of you, they should have a hand within a certain range. The Gap Concept says that your hand should be better than your range would have been if Player A had not bet.
The Gap Concept May Apply after the Flop
Let’s say that you called before the flop in the face of a previous raise. Now, after the flop, the raiser continuation bets. What value should you assign to your hand in order to call?
The Gap Concept would dictate that you fold unless you have dramatically improved your hand. The existence of the gap means that you cannot simply check; you have to bet or fold. You would fold with a borderline hand in the face of a continuation bet.
What if the Bettor is Bluffing?
There are a lot of cases of players bluffing in early position. It should never matter to you that you got bluffed out of a hand. If your hand were good enough to overcome the Gap, then you should call or raise. If your hand is not good enough to overcome the Gap, then you should fold.
Poker players can never expect to be able to ferret out every bluff. That’s why bluffing is so prevalent and so often successful.
Does the Gap Concept Have Real World Applications?
It does, and we will give two such examples. The first is the teaser rates for home buyer mortgages in the early 2000’s. Because of a law that was passed in the late 1970’s, and was enforced when Bill Clinton became president, banks had to issue mortgages to home buyers who couldn’t afford a mortgage based on best practices before the law was passed.
This led to banks offering what came to be known as a teaser rate: a low mortgage monthly payment that would last five years whereupon the mortgage per rate would go up dramatically.
This five-year period with a low monthly mortgage payment and the much higher mortgage payment after the five-year teaser period became two Gaps in the mortgage banking system.
For the home buyer, the Gap was the difference between the payment during the teaser period and the payment after the teaser period. This corresponds to the Gap between a player’s betting hand value after a raise before them.
For the banks, the Gap was the buyer’s ability to pay the mortgage during the teaser period and after the teaser period. This again corresponds to the player’s ability, based on his or her bankroll and hand value, to call or raise an earlier raise.
The upshot of these machinations in the home mortgage area was the bank crash of 2008! A lot of home owners walked away from homes they could no longer afford. A lot of poker players should walk away from hands that might have been good enough to bet on if an earlier player had not bet.
Sam Walton Faced Gaps in His Pursuit of a Successful Retail Business
Sam Walton by now is famous as the founder of the great Walmart chain of giant retail stores. Way back when, no one, not even Sam Walton, had any idea that Walmart would grow to such proportions.
Sam Walton faced gaps in His quest for retail business success. The first gap was between owning his store and renting the store. He had owned a Ben Franklin’s store. The problem was that he was renting the storefront and the landlord decided to go in a different direction and told Sam Walton that he wasn’t going to renew his lease.
The gap here was between the cost of renting and the instability of renting and the cost of owning the property. Sam Walton said that he would never rent again and bought a property that was going to become the first Walmart store.
The First Walmart
The first Walmart showed no signs that the chain would come to dominate American retail business. It was in a low population corner in a low population state, in the very northwest corner of Arkansas. Now, Sam Walton wanted expand his business. He faced the gap of renting or owning the store and also the gap of location.
The Expansion Gap
Sam Walton knew that his store was not ready to expand to a large city, even a semi-large city like Little Rock, the capitol of Arkansas. He needed to fill the gap of location. He decided to put the second Walmart store on a main highway relatively close to the first Walmart.
The term relatively close here represents a major gap. How far away was too far and how close was too close. He started the second Walmart about 20 miles down the road on a major local highway.
Same Walton continued to expand and soon faced another gap. This gap was how to centralize distribution of goods. The solution was to establish new Walmart stores in roughly a circle and to have the distribution center in the middle.
As Walmart continued to expand, the new stores formed concentric circles so distribution could still be centralized.
Gaps Appear Everywhere
People face gaps in many different situations. Countries face military gaps, politicians face gaps in catering to the left, the right, or the center. Sports teams with a budget for salaries face player performance gaps; does the team spend heavily on a single great player or does it spread the salaries among many good but not great players?
Juicy Stakes Encourages Players to Overcome Gaps
The gap we started the article with is not the only gap poker players face. The best way we can help players deal with gaps is to offer many different stakes levels for poker. We are an accomplished online poker room that caters to all players.
