I agree with your last sentence.Originally Posted by Freightman
Regarding the RA indices: My thought was that RA indices reduces variance, but the EV isn't as high. Example/ For Zen, doubling 10v10 is TC+7. But I may decide not to execute that play until TC+10. TC+7 would be the profit-maximizing play, but waiting till +10 would be considered risk averse play with slightly less EV. Right?
It's how you look at EV. Halves indexes for 10 v 10 are +4 and +7 respectively for double and risk averse double. At +4, EV is maximized, and captures a sliver over 50% of EV, but increases variance. At +7, a far greater percentage if EV is captured. You make more money per double, because you lose less of them, though by doubling everything in sight where appropriate, the overall profit capture is greater. Now, since variance us reduced, you can now look at taking a higher max bet. The higher max risk averse double compensates for the lower volume of at index doubles. Lost profit is now recaptured.
I follow you and that makes sense. Thanks for clarifying.
Disregard my last post, because I had a brain fart. I didn't mean that there would be less EV at +10 as opposed to +7 index. I worded that incorrectly. I meant to say that executing the play at +7 (profit-maximizing index), as opposed to not executing the play, has slightly more EV.
"Don, the question was about variance, not SCORE. The comments were about variance, not SCORE. Variance should only affect short term results, long term results being more closely aligned with SCORE. If SCORE had been mentioned in the question, then SCORE would have been addressed in the response.
"Next time that a possibility of ambiguity comes up, I'll be sure to get your interpretation of same, so that I may respond in a manner more in line with your thought process."
I don't mind the sarcasm; I just mind your misunderstanding of the concept. Reducing variance is simple: don't play. Zero variance. See how easy that was? What's that? Then you can't make any money? Oh, well. Minor inconvenience.
My point was -- and still is -- that doing things to reduce variance has to be considered within the total concept of what the bottom line is, and that's the SCORE. You wrote about risk-averse indices (I assume you've read part 2 of Chapter 13 of BJA3). It's easy to have the knee-jerk reaction that if you wait till a higher index to make a double, you'll lower overall variance (which is true), at the expense of losing some e.v. (also true). So, how do you get around the lowered e.v.? You raise your bets a little bit! And then what? Your variance now increases! So, again, you should be OK with that if, at the end, SCORE improves.
So, it's your right to discuss variance in a void all you want; for the others, who would like to understand more completely the full impact on their game, you then have to discuss what your variance-reducing tactic is, ultimately, going to do to the SCORE. Only then can you know if it makes economic sense to seek to reduce your variance.
This is why I called surrender the "Holy Grail" on p. 198. It gives you extra e.v. while simultaneously reducing variance -- something that is very, very rare in the world of finance ... or blackjack.
Don
T"his is why I called surrender the "Holy Grail" on p. 198. It gives you extra e.v. while simultaneously
reducing variance -- something that is very, very rare in the world of finance ... or blackjack."
Perfectly expressed.
Think of it this way - When Don Johnson won millions in the A.C. casinos based
on rebates, it would have been barely possible to succeed if he had failed to
convince the suits to allow him to play with PA rules. The NJ rules have a house
edge of 0.41% while the PA rules reduce that to 0.33% AND the variance reduction
NEEDED to be in play in order to properly milk that 'cash cow'.
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