I had a thought earlier today about the effect overlay has on winrate.

We base bankroll requirements on edge and variance. So, if we increase our edge than we can play bigger games with the same roll.

Story Time: (skip for the math question)
I play on a smaller site which doesn't have many tournaments. I usually only play cash games so that's not a problem, but I decided to play a tourney today. All of the ones they offered were either too small or too big. One of the bigger ones was out of my roll, but offered guaranteed money. It was a $100 20k guaranteed. My limit based on my bankroll requirements was $68. Since they needed 200 players to make the guarantee and there were only 100 with 3 minutes left before the tourney started, I decided to give it a shot. Registration didn't actually end until the end of the 1st level. There ended up being over 180 players in it .

Assuming we can accurately predict overlay, how much overlay do we need to play a tourney with x buyin, given that our bankroll only allows y buyin or less?

My answer: (lots of estimation, and I could just be completely wrong)
If you're an average player, you get your portion of the pool. so if the pool is 1000 and there are 1000 players in the tourney, your buyin is worth $1. So if I can buy into a $60 tourney, and the one in question is $100, my share of the overlay has to equal $40.

To take the earlier example, if we only got 100 players, there would be 10k to divide between 100 players, so my share of the overlay would be $100 and I could buy in.

If we get 150 players, it's 5k between 150 players, it's $16.67 per player, I can't play.

This math assumes I'm an average player and no vig. Niether is true, but the skill edge should more than cancel out the vig, so we're on the safe side.

How am I doing?