EVand ER, compare and contrast

[bluestreak86001]

Alright, I will try...

ER-is expected rate of return, a percentage
EV-is the actual dollars expected in change in bankroll

Lets go to the bank and put some money in it. Standard savings
account from the olden days, 5% interest compounded annually insured
by the Feds up to $100,000.

Put in $100, come back one year later, ER=1.05%, EV=$5.
Put in $1000,come back one year later, ER=1.05%, EV=$50.
This is one period of time.

···

******

In VP we have the ability to speed up time (twi-light zone) by going
up in denomination. Same number of hands/same coins per hand, but
higher denomination.

Going from quarters to dollars, everything else equal, increase of 4X
(warp four Scotty).

********

So even with a decrease in ER, can result in an increase of EV per
period of time, when going up in denomination.

*******

Throw in objective (CB, comps, promos) and subjective (host
evaluation, future offers, VIP status, Fun Factor) variables and
contraints in time, money, and play availability to make things
interesting.

BS

[Ednar]

If this is accurate which it certainly seems to be to me, then it is an
excellent definition and should be patented.

···

----- Original Message -----
From: "bluestreak86001" <graytleegray@aol.com>
To: <vpFREE@yahoogroups.com>
Sent: Tuesday, October 14, 2003 9:58 PM
Subject: [vpFREE] EVand ER, compare and contrast

Alright, I will try...

ER-is expected rate of return, a percentage
EV-is the actual dollars expected in change in bankroll

Lets go to the bank and put some money in it. Standard savings
account from the olden days, 5% interest compounded annually insured
by the Feds up to $100,000.

Put in $100, come back one year later, ER=1.05%, EV=$5.
Put in $1000,come back one year later, ER=1.05%, EV=$50.
This is one period of time.

******

In VP we have the ability to speed up time (twi-light zone) by going
up in denomination. Same number of hands/same coins per hand, but
higher denomination.

Going from quarters to dollars, everything else equal, increase of 4X
(warp four Scotty).

********

So even with a decrease in ER, can result in an increase of EV per
period of time, when going up in denomination.

*******

Throw in objective (CB, comps, promos) and subjective (host
evaluation, future offers, VIP status, Fun Factor) variables and
contraints in time, money, and play availability to make things
interesting.

BS

[mubowor]

Your message is as clear as daylight. You define your terms. Your
definitions coincide with the Dogma in vpFREE. My only comment is
that in other places ER and EV are not defined exactly the same way.
The most common variation elsewhere is to call EV what you have
called ER.

E (R? or V?) LOL

--- In vpFREE@yahoogroups.com, "bluestreak86001" <graytleegray@a...>
wrote:

Alright, I will try...

ER-is expected rate of return, a percentage
EV-is the actual dollars expected in change in bankroll

Lets go to the bank and put some money in it. Standard savings
account from the olden days, 5% interest compounded annually

insured

by the Feds up to $100,000.

Put in $100, come back one year later, ER=1.05%, EV=$5.
Put in $1000,come back one year later, ER=1.05%, EV=$50.
This is one period of time.

******

In VP we have the ability to speed up time (twi-light zone) by

going

up in denomination. Same number of hands/same coins per hand, but
higher denomination.

Going from quarters to dollars, everything else equal, increase of

4X

···

(warp four Scotty).

********

So even with a decrease in ER, can result in an increase of EV per
period of time, when going up in denomination.

*******

Throw in objective (CB, comps, promos) and subjective (host
evaluation, future offers, VIP status, Fun Factor) variables and
contraints in time, money, and play availability to make things
interesting.

BS

[vpFREE4]

Lets go to the bank and put some money in it. Standard savings
account from the olden days, 5% interest compounded annually insured by
the Feds up to $100,000.

I like this example as a vehicle for looking at EV and ER. I'm going
to expand on it a little after one minor clarification.

Put in $100, come back one year later, ER=1.05%, EV=$5.

Actually, your ER is 5% and your EV is $5 when you make your deposit
into the account.

One year later your actual return was 5% and the actual final value of
your interest earned was $5.

···

On 15 Oct 2003 at 2:58, bluestreak86001 wrote:

                                *******************

Taking this further, let's assume that you have several choices on where
to invest your $100. All of your choices are with a federally insured
institution, and all are relatively convenient to deal with.

Here are your choices:

Bank A - Offers a 6% rate.

Bank B - Offers a 5% rate.

Bank C - Offers a 4% rate.

Bank D - Offers a 3% rate.

Bank E - Offers a 2% rate.

All other things being equal, the "max-EV" solution is to invest
your $100 with Bank A where your ER is 6% and your EV is
$6 over a one year time period.

If all things aren't equal, one of the other banks may suit your
needs better, but you'll reduce your ER and EV by opting for
one of the other banks.

Reasons for not going with Bank A could include:

Bank B is much closer to my home and I'm willing to give up
1% for the added convenience.

I don't like the staff at Bank A.

My Significant Other works at Bank E and says I better do my
banking there.

                         ****************

If your goal is to get the best return on your $100 investment, you'll
go with Bank A (the max-EV solution). You may choose a different
solution if your goals so dictate.

IMO, this reasoning also applies to the play of a hand of video poker.

vpFREE Administrator

[Steve_Jacobs]

Gambling in any form is much different than interest from a bank.

Interest has zero risk associated with it, you can "wager" your entire
bankroll (life savings) without significant fear of losing it. To risk
your entire life savings on a single play of video poker would be
insane.

Two gambling propositions with identical EV can have a very
different amount of risk associated with them. When EV is equal,
the wager with lower risk is the better wager. This is why
it is misguided to compare different VP games strictly on the
basis of EV alone. EV is only a reliable indicator of the "best"
game when the games being compared have identical risk. When
one game has better EV while the other game has lower risk,
choosing the "best" game is not so simple, and both factors
need to be considered.

···

On Wednesday 15 October 2003 11:16 am, vp_FREE wrote:

If your goal is to get the best return on your $100 investment, you'll
go with Bank A (the max-EV solution). You may choose a different
solution if your goals so dictate.

IMO, this reasoning also applies to the play of a hand of video poker.