Liars poker

Liar's poker is an American bar game that combines statistical reasoning with bluffing, and is played with the eight digits of the serial numbers on a U.S. dollar bill. The numbers are usually ranked with a zero counting as a ten, and a 1 being highest as "ace". Each player holds one bill, unseen by the other players. The objective is to guess how often a particular digit appears among all the bills held by all the players. Each guess, called a "bid," must be higher in value or quantity than the previous bid. The round ends when a player challenges the most recent bid. Normally the game is played with random bills obtained from the cash register.

Liar's dice is a similar game played with dice, and Commune is a similar game played with cards.

Each player takes a dollar bill and looks at its serial number, without letting any other players see. A player is chosen to start, and they make an opening bid on how many of a particular digit they believe appears across all serial numbers held by the group. For example, if the first player bids three 6s, he is predicting that there are at least three 6s among all the players' banknotes, including his own.

The next player can bid a higher number at that level (three 7s), any number at a higher level (four 5s) or challenge. The game continues clockwise around the table until a particular bid attracts a challenge from every player other than the bidder.

When a challenge is made, each player reveals how many of the bid number they have on their note's serial number. If the challenge was correct (and the number on the bills is lower than the challenged bid), the bidder loses a dollar to each of the other players. If the challenge was incorrect, the bidder wins a dollar from each of the other players.

Trading floor personnel in the 1980s often played a variant on the above whereby a player who is called by all the other players can raise his own bid, thereby doubling the bet. For example, if he is called by all the other players on five 4s he can then bid, say, five 5s, with the bet doubled to two dollars. Called again, he might then go to five 6s, with the bet increased to four dollars. In this way, a clever player might reach his intended target of, say, five aces and win, say, 16 or 32 dollars from each of the remaining players instead of merely one dollar. For this reason, many finance professionals discounted Michael Lewis's story of the "million-dollars-no-tears" bet allegedly proposed by CEO John Gutfreund on the grounds that there can be no single-stake bet in liar's poker because one cannot know whether or not the bet will be escalated in this way.

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