Having finished Liar’s Poker: Rising Through the Wreckage on Wall Street by Michael Lewis, last week, it seemed appropriate to explain the rules of the game. Yes, a review might have been interesting, but definitely not more entertaining (and I would consider the book an entertaining read). So, in the spirit of trading sites everywhere, I have written this tutorial to explain the basics of liar’s poker:

1) There are several version of liar’s poker. One involving bidding and another more in the spirit of poker. Because the bidding version appears to be the most popular, and because Micahel Lewis features it in his book, I will discuss the general rules for that game. As with any game, remember to clarify rules before beginning since more than a single version of the game likely exists.

2) The game requires 2 or more players and each player needs a dollar bill (several if you want to increase the uncertainty of serial numbers drawn).

3) Put all bills face down, covering the serial number, into a pile in the center of the group. Shuffle the bills.

4) Have each player take a bill. Do not show it to any other players. Keep your “hand” covered, just like in a game of cards.

5) Look at your serial number. In general, 1’s count as aces and 0’s count as tens, but make sure to clarify this at the beginning of the game. Some versions play with 0 being the lowest number and 9 being the highest. Either way works out well. Count the number of times each number appears in your serial number. This is your hand. Remember it.

6) Begin the bidding. You can choose the starting player in any number of ways. If you have only two players, a coin toss works well. Otherwise, rolling dice or picking a card. Use your imagination.

7) Make a bid. That means, make a bet on how many of a certain number you believe to be among all the serial numbers. Say you have 2 5’s on your serial number. You could safely bid 2 fives, as you know there to be two five’s for a fact.

8) Continue to the next person. This person can now bid a higher amount of the number you last bid on, say 3 5’s; or, they can bid a higher amount on a lower number, say 4 4’s or 4 2’s; or, they can bid on any amount of a higher number, say 2 6’s or 1 ace.

9) Another option everyone after the first player has is to call the last player’s bid a lie, or a bluff. Say you do not think there could possibly be 4 aces among all the serial numbers, but that was the last bid. You could call the last player’s bid a bluff.

10) Now, the next person can agree with you and also call that player’s bid a bluff. But if they do not believe it to be a bluff, they can also continue the bidding in the manner explained in step 8.

11) If the belief that a person has in fact bluffed becomes the consensus of the entire group, everyone must show their serial numbers.

12) Count up the serial numbers.

13) If the person being called the liar actually bid correctly (e.g. the player said there were 5 aces and there were, or there were more), then that player wins. Each player gives him a dollar, or a point, whichever has been decided upon.

14) If the person is incorrect, then that player must give everyone else a dollar, or a point, whichever is decided upon. You do not have to play for dollars; playing with smaller or larger amounts works just as well.

To watch a sample game, click here. There are also free tournaments and games on that site. If you are interested in the odds behind the game, I found this page (go to the bottom). It’s not perfect, but interesting nonetheless.