Liar’s Poker: Rules, Strategy, and the Wall Street Connection

What is Liar’s Poker?

Liar’s Poker is a bluffing and betting game that became popular among traders. Players use the digits in the serial numbers of U.S. dollar bills (or other bills) to make claims about how many of a particular digit appear across all bills in play. The game rewards a mix of statistical reasoning, psychology, and well-timed deception.

How the Game Works

• Each player holds one or more dollar bills and keeps the serial numbers hidden from others.
• A bid is stated as a quantity and a digit (for example, “three 4s”), meaning the bidder asserts there are at least that many occurrences of that digit among all bills.
• Players take turns either:
• Increasing the bid (raising the quantity, or raising the digit while keeping the same quantity), or
• Calling the previous bid a lie (challenging it).
• When a bid is challenged, all bills are revealed and digits are counted. If the bid is accurate, the challenger loses; if the bid is inaccurate, the bidder loses.
• Stakes are decided before play (commonly a small amount per round), and payout rules vary by group.

Key rules and conventions
* Digits are commonly ranked with 0 as the lowest and 9 as the highest.
* The precise bidding order and how raises are structured can vary by house rules—agree on conventions before starting.

How It Relates to Liar’s Dice

Liar’s Poker is analogous to Liar’s Dice: both are hidden-information bidding games in which players estimate totals across all hands/dice, bluff, and call bluffs. The mechanics and strategic concepts translate readily between the two.

Basic Strategies

• Bluff smartly. The game rewards well-timed deception, but predictable bluffing becomes exploitable.
• Use probability. With more players (and therefore more digits in play), higher counts become more plausible. Adjust bids to reflect the likely total.
• Escalation pressure. Because bids must increase, the game often pushes toward riskier claims—use this to force mistakes from opponents.
• Observe behavior. Track who frequently bluffs or folds under pressure and use that information in later rounds.
• Risk management. Call a bluff only when the bid is unlikely given the number of bills in play and any information revealed by prior challenges.

Practical tips
* Agree on stake and bidding conventions before the game.
* Start conservatively until you learn other players’ tendencies.
* When in doubt, consider the group size: more players usually justify higher bids.

The Book: Michael Lewis’s Liar’s Poker

Liar’s Poker is also the title of Michael Lewis’s non-fiction, semi-autobiographical book about bond trading culture at Salomon Brothers in the 1980s. The book mixes personal anecdotes with industry critique, portraying a high-risk, competitive environment where bravado and deception were common. It’s widely read as both a memoir and a candid look at Wall Street excesses.

A brief corporate note

Salomon Brothers later merged with Smith Barney and became part of Citigroup; the Salomon name was phased out in the early 2000s.

Is the book true?

The book is based on the author’s experiences and is generally considered semi-autobiographical: anecdotal and interpretive rather than a comprehensive institutional history.

Bottom Line

Liar’s Poker is an engaging game of hidden information, probability, and bluffing that illustrates how psychological pressure and statistical reasoning interact. Its cultural resonance was amplified by Michael Lewis’s book, which used the game as a metaphor for the risk-taking and competitive spirit of 1980s Wall Street. If you play, set clear rules and stakes, watch opponents closely, and balance bluffing with sound probability-based decisions.

If gambling is a concern, seek professional help or local resources for support.