The Peter Principle is a concept set forth by Dr. Laurence J. Peter and Raymond Hull which states that in any business or hierarchy, people tend to be promoted and move up within that hierarchy until reaching a level of incompetence. They are able to perform the functions of each level superbly until reaching a level where they can no longer do the job properly. But what is the Peter Principle in poker’s context?
Sometimes spotting the difference between a player on a downswing and a losing player at a certain level can be difficult.
The principle was conceived with the workplace or business world in mind. However, it can also be applied to the game of poker and the various levels of play that are available or can be attained. Typically, players begin playing the game of poker at micro-stakes or low levels, gradually moving up once they have proven they can win at the lower levels. But if you were to observe players who do move up, it is quite common to find many having problems winning at higher stake levels.
Players who repeatedly win at, say, $2/$4 and $3/$6 will often desire to take on the higher levels of $5/$10 and $10/$20, only to find that things tend to not go as smoothly for them as in the lower stake levels. The jump is made because the higher the level and the bigger the pots, the more profits that can be earned. But if you cannot win at the higher stake levels, it defeats the purpose of moving up. In order to maximize profits, it is suggested that players play at one or two levels below their incompetence level.
Moving up levels once you feel you have “mastered” a lower level can be devastating to your bankroll if you are not fully prepared to play at that level. Nobody likes to believe that they would be incompetent, but let’s face it. There are certain levels where you just feel more comfortable as the stakes are more aligned with your bankroll. The smart player knows his limitations and abilities.
On a personal level, whenever I moved up in class at the poker tables, it always took a fair amount of time to adjust to the amount of money being wagered and tossed around. Tending to play more on the tight side, I often found myself to be gun shy in certain situations when more money than I was used to betting was required to be bet or to make a call. This is not a good way to play, as I was out of my element or comfort zone, which affects the decision-making progress in a negative fashion. Of course, these are some of the tribulations one faces when attempting to move up levels.
That being said, there is nothing wrong with finding a comfortable stake level that you can beat on a consistent basis and staying there. After all, the goal is to make money, not to be playing at the nosebleed levels. After experimenting with moving up, I have found my level of competence, so to speak. I feel comfortable there and see no need to try moving up again.
You may be wondering how to avoid the pitfalls of the Peter Principle in poker. A good suggestion is to first observe games at higher stake levels and look for the mistakes the players may be making. If you feel you can spot the mistakes and would be comfortable at that level, perhaps you are ready to step up in class at the poker table. However, be forewarned, there are certain levels where you believe you can spot mistakes being made, but the level of play may be so high that the move is not a mistake at all. Its just a crafty move that is above your head or level of play.
It is interesting to note the Peter Principle when reading the comments made by players on online public poker forums and news sites. When analyzing the plays made by pros in various situations, poker players love to give their opinions on why a move by a particular pro may or not have been successful. Simply by reading some of the comments, it is readily obvious that the level of play that the pros are playing at is way beyond the comprehension of some of the posters. This is not to imply that some players lack intelligence. Its just a fact that some players will attain greater skill levels than others. But the key is to find the level where you profit the most and feel the most comfortable.
There is no need to hurry in trying to move up stake levels when you happen to be winning at poker. If you do feel you are ready to progress further up the ladder, do yourself a favor and watch the higher stake games for a while. Try to spot what players might be doing wrong and how the game differs from your current level of play. In all honesty, incompetence is not a nice word and nobody likes to feel that they would be incompetent at anything or at any level. However, there is a lot to be said for the reality of the Peter Principle as applied to the game of poker. The sooner that you can accept the fact that there may be levels of play beyond your reach, the sooner you will be able to gravitate to a skill level in which you are successful and quite profitable. Basically, know yourself and your level of ability at the poker table.
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