Blackjack tournament strategy for game with SUBSTANTIAL player edge?

I managed to get a Spanish 21 layout from my casino and decided it'd be fun to run some tournaments with friends. To add a unique twist, I decided to run Spanish 21, S17, ES, with redoubling, and with all the 10-value cards added back. This game ends up with a player edge of around 2.6%. Also, I simplified the Match the Dealer bet to be a simple 12-1 (pretty close to 0% house edge, right?) if the player's top card matches the rank of the dealer's face card.

Players start with 2000-3000 chips (haven't decided yet), with a minimum bet of 25 and a maximum bet of 2000 (maximum of 200 to 250 on Match the Dealer, which would pay out 2000-3000 if hit). The tournament lasts for one six-deck shoe. After the cut card, we play exactly one more hand to finalize the game.

Most intelligent players play tournaments conservatively, betting the minimum in hopes that idiots will knock themselves out at first. However, doesn't this strategy go out of the window when the player is expected a substantial positive return on every hand? Even with piss-poor play, a player can enjoy a player edge. Also, how would this neutral-EV side bet influence the game?

I dealt a "simulation" shoe with four imaginary players of varying aggression levels. Each started with 3000 chips. At the end of the shoe, the four players ended up with 21300, 28900, 25950, and 50400. What the hell?

How would you play in a game like this?

Quote: Funbox

Most intelligent players play tournaments conservatively, betting the minimum in hopes that idiots will knock themselves out at first. However, doesn't this strategy go out of the window when the player is expected a substantial positive return on every hand?

Kelly Criterion: Your bet per hand is the same % of your bankroll as your advantage, also expressed in %.

You only play tourneys conservatively in the early stage.