A new perspective and defintion: Effective rake

A few players have awakened to a new concept or perspective of evaluating rake.  We want to call this 'effective rake' since rake as a % doesn't reflect the true cost of playing on a poker site.  We can illustrate this simply with the following:

On two separate but equal sites A and B rake is 7%
Player x wins more on site A then site B

We say the effective rake is higher on site B than site A

Obviously this will be a reflection of the player pool most often.  What ideal poker proposes is that effective rake eventually becomes a transparent index which allows players to evaluate the power of their dollar in exchange for chips.  This means then that we are also implementing a sliding rake that changes in respect to the overall skill level of the the player pool.

Much has been said on this topic, as players in general are very unknowledgable about the macro workings of the poker economy, however if there is any single most important misconception to clear up I would suggest it is this one.  

As a quick note we should understand that when we use moral poker as the foundation for the game, ideal poker in regards to effective rake, follows as a natural process.  This is why I suggest and hope we approach this process holistically.

It has been suggested that effective rake is not the correct term, but I worry that it in fact IS the correct terms and since the definition has been hidden from the players for so long, that we have mis-defined the word to mean something it should not.  So we might choose a new word to describe the above, however we should use caution in allowing the unknowledgable masses define the foundational words of the game.

So in order to calculate the effective rake from a players perspective we need

Winnings + Rake (fees) = Losses

effective rake = rake(fess)/losses.
or
effective rake = losses - winnings/losses

etc.
Example: Over a certain time sample on a site there were 2.5M losses and 0.5M winnings

Effective rake = 2M/2.5M = 80%

I see now what you mean here, you have not given it from the players perspective but rather the sites perspective. From the players perspective effective rake has much to do with the specific player pools vs game type their are etc.

It also involves the overall variance of their games which is something not immediately identifiable until we think about long term contracts and volatility.

From the players perspective, vs a sites perspective, effective rake today is a very complex formula, although i believe it could be done to some extent.

In the future the players perspective may be the same as a sites perspective, but there will still be to distinct perspectives of economy from either the players side or the 'sites'.

Well no.

rake/losses is not a view from a sites perspective. It is the perspective from the playerS.

What you describe is the view from one single player. That is about as different as economics is to business. One looks at the economy as a whole the other at one enterprise (which is part of the economy).

Looking at the poker economy as a whole, the skill of different players does not really matter. I am now assuming that a good or healthy poker economy has many winners and a bad one has few. What does matter for the health of the poker economy though is how much rake is paid. Much or little rake is relative to how much is won and lost. If the rake is high very few will win if the rake is low many will win. The only thing that can mess up the poker economy is rake.

From a single player perspective it is quite different. A player has to be able to beat the field + rake.

We could describe this expectation to win as:

E = S - P - R.

Where:

E: Expected results.
S: Skill of player
P: Average Skill of the player pool
R: Rake

This is very apparent to most players. Everyone who knows that poker is a skill game understands that if players are better than themselves they stand to lose and vice versa. However most people also think that if players get better overall its harder to win at poker in general. That is not true. Poker is a fantastic game that will always separate winners and losers. As long as people will play the game no one person will play the same way. As such there will always be players that play better than others and as such the only thing that can make a game hard to beat ( i.e. few winners) is the rake.

If you sit the 10 best poker players in the world at one table, does that mean no player will win anymore because they all play so well? No it does not. There will still be winners an losers and in fact the game will be quite beatable. If however you introduce rake to this table fewer players will win. The higher the rake, the fewer players will win. If the rake is as high as the winrate of the best player in the game nobody will win anymore.

As such there is a direct correlation of the effective rake players pay to how beatable or how good the games are from the perspective of the players.